I '5 re;~..~.- O L *ffiY SS1l€ F16 so 1'? 1339 NO LONGER ‘ " ‘*3’- PRQPERTY 21.21“ 01,515.; LEE‘&R.AR‘%’ Washingtcm urmrersity CONGRESSIONAL RESEARCH R SERVICE E UBRARY OF Universit ofMissouri-Columbia Hlllhl Hlfllwllllll HHIHI HIHHIN 010-103940381 » THE FEDERAL SYSTEM IN THE 19808: MONEY, POWER, AND RESPONSIBILITY ISSUE BRIEF NUMBER IBBIO44 AUTHOR: OSDOIIIII , Sandra S . Government Division THE LIBRARY OF CONGRESS LCONGRESSIONAL RESEARCH SERVICE MAJOR ISSUES SYSTEM DATE ORIGINATED O3/30/81 DATE UPDATED O5/l7/82 FOR ADDITIONAL INFORMATION CALL 287-5700 0517 CRS- l IBSIO44 UPDATE-O5/l7/82 ISSUE DEFINITION The current role of the Federal Government in the federal system -— and of government in society -- will be redefined if various policies of the Reagan Administration are adopted. The proposed Federalism Initiative would result in a fundamental redistribution of responsibility for domestic functions of government, with the Federal Government eventually withdrawing from some functions completely. The Administration's regulatory goals could result in regulations affecting health, safety, and the environment being turned over to the States. The American people and their elected representatives will need to reevaluate their expectations of government and to reopen the debate over centralization versus decentralization that has recurred time and again during the life of the American federal system. BACKGROUND AND POLICY ANALYSIS The federal system of government adopted by the United States in 1789 after months of impassioned debate, but frequently ignored by contemporary citizens, has once more become a focal point of political debate. Although the current blaze of media and political light on the subject was sparked by President Reagan's budget reform plan in February 1981, and refueled by the State of the Union Message on Jan. 26, 1982, the tinder for the spark had been accumulating for a number of years. Renewed interest in the federal system has been generated by those who are convinced that the Federal Government has overstepped the bounds of its appointed role in that system. Their premise is that the Federal Government has become involved in too many activities that formerly were the sole responsibility of State and local governments or the private sector, thereby "overloading" the intergovernmental system. Adherents to this View of the current state of the federal system argue that earlier visions of "partnership" and "cooperation" have been replaced by new images of inadequate implementation, growing and costly fragmentation, increasing intrusiveness of Government, and new antagonisms. The rules and regulations that govern federally supported activities are characterized as "coercive," "burdensome," "intrusive," "red-tape." Activity by each level of government in virtually all domestic governmental matters is seen as an obstacle to accountability, equity, administrative effectiveness, and economic efficiency. " Although critics of the current state of the federal system seem to have seized the offensive position, capturing the "reform" banner for themselves, the defenders have by no means withdrawn from the field. They argue that the heavily marbled character of the federal system today (with all levels of government active to some degree in virtually every domestic activity) is a reflection of the interdependent economy and society served by the system. Categorical and heavily conditioned block grants, they assert, are appropriate means of promoting national objectives, and the conditions attached to these grants are intended to promote such desirable ends as achieving minimum national levels of program performance, enhancing recipient administrative and personnel capacity, and attaining certain widely accepted social and environmental goals. Finally, they argue that an active Federal Government is essential if the aspirations and needs of minorities and poor CRS- 2 IB8lo44 UPDATE-O5/l7/82 people are to be fulfilled. THE FEDERALIST REVISITED In recent years, voices from various points on the political spectrum have called for a reassessment of the federal system. The goals of the reassessment are not necessarily the same for all interested parties, but they might include ndefining which governmental functions are inherently national in nature and which are inherently State or local, examining how many functions currently are allocated t6’ the various levels, and recommending realignment of these functions in a way that will adjust the balance within the federal system. A ? Since the inauguration of President Reagan, this debate has moved from the rarefied atmosphere of the classroom, the think tank, and the study commission to the hurly-burly of the front page, the congressional committee room, and the budget process of the United States Government. One observer of the federal system has commented that the Administration has opened Pandora's box -- has released a set of forces and raised a set of issues as potent as those that were associated with the founding of the federal system. The new interest in the federal system as a matter of immediate, real-world concern results from the application of President Reagan's long=held convictions with regard to the operation of the system. The latest flurry of interest can be ascribed to the proposals in the State of the Union Message, but those proposals are the culmination of a year of initiatives that have stimulated the interest and debate. These initiatives were based on the following motivating factors, according to the Administration: -— A desire to restore the constitutional balance between the Federal Government and State and local governments. -- A need to reduce the growing number of categorical Federal grants-in-aid, which the Administration associates with-too many conditions, regulations, and staffing requirements. —- A belief that State and local governments are more responsive to the needs of both benefit recipients and taxpayers. -- A conviction that dividing responsibility for a program between the Federal and other levels of Government results in neither being responsible. The Administration's New Federalism initiatives already have included far-reaching changes in the form and funding levels of grant-in-aid programs and in the attachment of certain conditions (regulations) to these and other forms of Federal activity. The proposals in the State of the Union Message go far beyond this, however; rather than focusing on the question of Federal aid design, it focuses on whether the Federal Government should be involved at all in many domestic functions. As the Director of the Office of Management and Budget pointed out at a February hearing before the Senate Committee on Governmental Affairs: CRS- 3 IB8lO44 UPDATE-O5/l7/82 ...the need to properly sort out Federal and State responsibilities has become increasingly clear to public officials, political scientists and‘ intergovernmental bodies. The salient feature of President Reagan's Federalism Initiative is that it is the first specific and comprehensive plan to deal with the issue that has ever been put on the table with the support of a national Administration." The Administration's proposals did not, of course, arise out of a vacuum. Other proposals for a realignment of the federal system have been put forth in recent years. The Advisory Commission on Intergovernmental Relations has recommended that the Federal Government assume full financial responsibility for Aid to Families with Dependent Children, Medicaid, General Assistance, and for governmental programs that are aimed at meeting basic human needs for employment security, housing assistance, medical benefits, and basic nutrition; this would be accompanied by a major sorting out of functional assignments in other areas by reducing substantially the number of Federal assistance programs through termination, consolidation, or devolution to State and local governments. The National Governors‘ Association and the National Conference of State Legislatures proposed in 1980 that the Federal Government should assume primary responsibility for national defense, income security, and a sound economy while State and local governments would be responsible for education, law enforcement and transportation. Other calls for a "sorting out" process have been less specific. In recent months, a number of mayors and governors have called for a "domestic summit" involving the Administration, congressional leaders, and State and local officials in order to seek agreement on ultimate prime responsibilities for government programs, budget targets, and a time frame for implementing goals. In early December, Democratic governors met in a historic meeting with the Senate minority leadership to discuss the same topics. In mid-December, a revived State-Local Coalition issued a statement of principles and priorities of "partnership federalism" and called for a Domestic Summit on Federalism soon after the first of the year. Many of these activities and proposals were the result of the unhappiness of some State and local officials with what they perceived to be a de facto realignment of governmental functions, achieved by reducing funding levels for current Federal programs, without consultation with State and local representatives and without providing time to adjust to the new order of things. . For some time, the Congress has been considering the creation of a new forum for dealing with a reassessment of the federal system by establishing a Commission for More Effective Government (S. 10, H.R. 18). The Commission would, among other things, study the nature and extent of activities of the Federal, State, and local governments, the relationships between the governments, and the effects of the redistribution of responsibilities. Other bodies are currently studying various aspects of federalism. A On April 8, 1981, President Reagan announced the formation of a Presidential Federalism Advisory Committee as a "first step in helping me to, restored a proper Constitutional relationship between the Federal, State, and local governments." The Advisory Committee, composed of Governors, State legislators, mayors, county officials, and Members of Congress, is chaired by Senator Paul Laxalt. The purposes of the Committee are to provide for: CRS- 4 IB8lO44 UPDATE-O5/l7/82 full and adequate input on Federal legislative proposals impacting on the States and localities; advice in implementing the Administration's federalism proposals; and assistance in developing long-term policies to reverse the current trend of greater control over State and local programs by the Federal government. On the same day that he established the Presidential Federalism Advisory Committee the President named James G. watt, Secretary of the Department of the InteriorJ chairman of the Advisory Commission on Intergovernmental Relations; the Administration cites increased executive branch participation in the Advisory Commission's work as one achievement on its federalism agenda. : The Administration's emphasis on Federal-State, as opposed to Federal-local, relations has spawned several new forums intended to clarify and strengthen State-local relationships. The National Governors‘ Association, for the first time, has created a permanent Committee on State-Local Relations. The International City Management Association has established a Network on State-Local Relations, whose purpose is to have city managers act as catalysts in each State in developing and implementing improved techniques for State-local relations. with his Jan. 26, 1982, State of the Union Message, President Reagan moved beyond theoretical proposals for sorting out functions to offer a two—part plan for reassigning responsibility for domestic governmental functions. The Federalism Initiative, as originally proposed, has two major components: A "swap" of Medicaid to the Federal government for full funding in return for which the States would assume responsibility for the food stamp and AFDC welfare programs. A "turnback" of responsibility to the States for over 40 Federal programs in education, community development, transportation and social services along with funds from a $28 billion Federal trust fund to be financed by existing Federal excise taxes. The turnback would be voluntary through FY87, permanent after that. The 40 programs include l24 separate grants. The program would be phased in over 8 years, starting in FY84. By 1991, State and local authorities would assume responsibility for these turned back programs. The State and local governments would also receive equivalent revenue sources (not revenues) through the elimination of major Federal excise taxes (alcohol, tobacco, telephone, and motor fuel except for a 2 cent per gallon tax retained by the Federal Government) and the phase-out of the Federal windfall profit tax on decontrolled oil. (See the following CRE Issue Briefs for discussion of the "swap" components: Food Stamps: Dismantling the Federal Program, MB8220l; The President's Federalism Initiative -— Proposed Transfer of AFDC to the States, MB82202; The President's Proposal to Federalize Medicaid, MB82209). CRS- 5 IB8lO44 UPDATE-O5/17/82 The President plans to submit enabling legislation to the Congress this year. Representatives of the Administration have been negotiating with State and local officials and Congress to develop more specific program designs. A number of counter-proposals have been made as a result of this consultation process. GRANT REFORM Many of those who seek a realignment of power in the federal system focus on the grant-in-aid system, which they characterize as a major vehicle for centralization and nationalization and was a primary source of intergovernmental trouble. Grants-in-aid involve all levels of Government as well as individuals and the private sector in what critics characterize as a "collage of chaos." Grant "reformers" may not always share the same motives; some believe that the Federal Government should not handle certain functions at all, while others believe that the Federal Government's grant-in-aid system should continue, but should be streamlined and rationalized. Approaches to repairing perceived defects in the system range from mechanistic efforts to improve the operations of the existing categorical grant system or to establish a standard procedure for the consolidation of these grants (e.g., the Joint Funding Simplification Act andl the Federal Assistance Improvement Act) to a more fundamental shift in the grant system away from narrow categorical grants to block grants (which are characterized by consolidation and decentralization of authority) or general purpose grants. Historically, the Congress has tended to oppose both the mechanistic approaches and the more sweeping structural changes in the Federal aid system. The Administration intends to take administrative actions that could achieve some of the objectives that have not been "achieved through legislation. For example, if the "fast track" for consolidation proposals embodied in Title I of S. 807 is not enacted, the Administration may use existing authority under the Joint Funding Simplification Act in order to write national regulations encouraging joint funding undertakings, thereby achieving some of the goals of consolidation. The terminology associated with attempts to restructure the Federal aid system is not always precise; this lack of precision can obscure significant differences in the various approaches. For example, the "block grants" proposed by the Reagan Administration as one device for reducing the Federal budget were far more similar to the special revenue sharing grant proposals made by the Nixon Administration than they were to existing block grants. Existing block grants represent a "hybrid" grant form, mixing in varying proportions elements of categorical grants and special revenue sharing. The Advisory Commission on Intergovernmental Relations has defined a block grant as "a program by which funds are provided chiefly to a general purpose governmental unit in accordance with a statutory formula for use in a broad functional area, largely at the recipient's discretion." Block grants usually involve the consolidation of categorical grants. Special revenue sharing would also consolidate existing categorical grants; however, block grants frequently retain some portion of the Federal administrative controls associated with the categorical grants. Special revenue sharing would eliminate virtually all of these controls. Block grants for education might limit the use of the funds to areas previously funded by the categoricals; special revenue sharing would not. Block grants CRS- 6 IB8lO44 UPDATE-O5/l7/82 generally continue requirements related to matching and maintenance o” effort; special revenue sharing would not. Block grants would prescribe administrative arrangements at the recipient level: i.e., role of governor, role of State legislature, role of line agency, etc.; special revenue sharing would not. Block grants may require that an application for funds or a plan for the use of the funds be approved by the Federal administrator before funds would be made available; special revenue sharing would not require prior Federal approval. The FY82 Reagan budget reform plan proposed to consolidate over I00 categorical grants into a few "block" tgrantsv for education, health, and social services. The FY83 Budget proposes to create seven new block grants consolidating 40 categorical grants, and to expand three of the block grants authorized by P.L. 97-35. The new block grantsi would deal with child welfare, rental rehabilitation, training and employment, welfare administration, vocational and adult education, education for the handicapped, and rehabilitation services. The Maternal and Child Health Block Grant would be expanded to include the WIC nutrition program for women and young children now administered by the Department of Agriculture; the Primary Care Block Grant would be expanded to include black lung, migrant health, and family planning grants; the Low Income Home Energy Block Grant would be expanded to include emergency assistance. (See the following CRS Issue Briefs or reports for discussion of particular block grants: Grant Consolidation for Education Programs, IB7902l; Low-Income Energy Assistance Program: 1982 Issues, MB822l3; Social and Community Services Block Grants: FY83 Budget Issues, MB822ll. Health Block Grants, CRS Report 81-269 EPW; Child Welfare: Proposed Block Grant, MB820l2; Primary Care Block Grant: Administration's FY83 Budget Proposal, IB82049). The Administration has used the block grant concept as a means to several ends: reducing the Federal budget, reducing the Federal role in domestic functions while decentralizing power and (reduced) resources to State and local governments, and reducing fragmentation and duplication in the grant system. President Reagan made this clear in his July 30, l98l, speech to the National Conference on State Legislatures: "Block grants are not a mere strategy in our budget as some have suggested; they stand on their own as a federalist tool for transferring power back to the State and to the local level." with the unveiling of the New Federalism proposal in his State of the Union Message, it became clear that block grants were a step in the transition from the old to the proposed new system: they were designed to shrink Federal funding and to prepare recipients for the full assumption of previously shared programs. The main arena for block grant activity in the first session was the budget reconciliation process. The Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35) creates nine new block grants; these block grants vary in terms of numbers of programs involved (some affect only one program), effective date, and other significant details. The block grants created or amended by P.L. 97-35 are listed below in the order in which they appear in the law. l. Community Development Block Grant Amendments Citation: Title III; Sec. 301-315 Effective Date: Sixty days after publication of final regulations; however, if a State opts not to participate in the Small Cities program, the Secretary will continue to administer the :5.’ CRS- 7 IB8l044 UPDATE-05/l7/82% program in that State. Authorization: FY82; $4,l66,000,000; FY83: $4,l66,000,000; the small cities program, which may be administered by the States as a result of the Amendments, will receive 30% of this amount, calculated after set-asides are made. 2. Elementary and Secondary Education Block Grants Citation: Title V; Sec. 551-596: Chapter I and Chapter II Effective Date: July 1, 1983, except for the Follow-Through Program, which will be phased in beginning in FY83; its repeal will not be effective until Oct. 1, 1984.? Authorization: FY82 through FY84: $589,368,000, annually 3. Community Services Block Grant Citation: Title VI; Sec. 671-683 Effective Date: Oct. 1, 1981; however, 90% of the program funds must go to existing community action agencies in FY82. If a State chooses, the Secretary is authorized to continue to operate the program in that State through FY82. Authorization: FY82 through FY86: $389,000,000, annually 4. Preventive Health and Health Services Block Grant Citation: Title IX; Sec. 1901-1909 Effective Date: Oct. 1, 1981; however, emergency medical services, hypertension programs, and the rape crisis centers all are guaranteed funding at specified levels. Authorization: FY82: $95,000,000 FY83: $96,500,000 FY84: $98,500,000 5. Alcohol and Drug Abuse and Mental Health Block Grant Citation: Title IX; Sec. 1911-1920 Effective Date: Oct. 1, 1981; however, in FY82 the States must spend the same proportion of their total allocation on mental health as they had been spending when the programs were separate; 35%” of the State's substance abuse allocation must go to alcoholism, and 35% must go to drug abuse. Authorization: FY82: §491,ooo,ooo FY83: $511,000,000 FY84: $532,000,000 6. Primary Care Block Grant Citation: Title IX; Sec. 1921-1932 Effective Date: Oct. 1, 1982; after this date, a State may choose to operate the program or to have the Secretary continue to operate it. Authorization: FY82: $ 2,500,000 Planning Grants $284,000,000 Operating Grants CRS- 8 IB8l044 UPDATE—05/l7/82 FY83: $302,500,000 FY84: $327,000,000 7. Maternal and Child Health Block Grant Citation: Title XXI; Sec. 2191-2194 Effective Date: Oct. 1, 1981; however, States may opt to continue categorical funding until Oct. 1, 1982 or to change over at the beginning of any quarter between Oct. 1, 1981 and Oct. 1, 1982. ,~ Authorization: FY82 through FY84: $373,000,000 annually 8. Social Service Block Grant Citation: Title XXIII; Sec. 2351-2355 Effective Date: Oct 1, 1981 Authorization: FY82: $2,400,000,000 FY83: $2,450,000,000 FY84: $2,500,000,000 FY85: $2,600,000,000 FY86: $2,700,000,000 9. Low-Income Energy Assistance Block Grant Citation: Title XXVI Effective Date: Oct. 1, 1981 Authorization: FY82 through FY84: $l,875,000,000 annually MANDATES AND REGULATIONS Another subsidiary issue in the debate over the health of the federal system is that of Federal mandates and regulations. It has been estimated that 1,200 mandates and conditions of aid now accompany Federal aid to State and local governments. Fifty-nine of these are policy requirements that apply to most Federal grants, Those who favor the current system argue that these mandates are perfectly legitimate methods of ensuring the attainment of generally accepted national objectives in areas ranging from civil rights to environmental protection to financial ethics. They would argue that although the administration of these regulations might be simplified and improved, the regulations should not be terminated. Title IV of the Federal Assistance Improvement Act of 1981 (S. 807) provides for retaining the cross-cutting- national policy requirements while improving the procedures by which the policies are developed, implemented, and evaluated, so as to reduce the overall administrative burden of such requirements. ACIR has recommended that Congress enact legislation authorizing the President to suspend implementation of such requirements, under certain circumstances, for up to 180 days while alternative proposals are developed. 0 0 Others would argue that although the intent of these cross-cutting mandates may be entirely laudable, the. grant system is an inappropriate mechanism for carrying them out. Consequently, the scope of such conditions should be restricted. The Presidential Task Force on Regulatory Relief, headed by Vice President CRS- 9 IB8lO44 UPDATE-O5/l7/82 George Bush, is reviewing suggestions for regulatory changes made by State and local officials. The Office of Management and Budget now reviews all new regulation proposals, as well as changes to existing regulations. The block grant regulations promulgated by the Departments of Health and Human Services, Housing and Urban Development, and Education are exhibited by the Administration as illustrations of the changes that it intends to institute through the regulatory process. The goal was to make the regulations as simple and nonprescriptive as possible, leaving it up to the States to interpret statutory requirements and to administer the programs in accordance with their own legal requirements nather than those of the Federal administrator. For example, no standard format for planned use reports is put forth by thei regulations; terms such as "low- and moderate-income families" and "substantial share," which in the:past would have been defined in the regulations will now be defined by each State. The Administration plans to extend its regulatory philosophy to other grant programs; existing program regulations will be reviewed under the same ground rules as the knew block grants -— that is, if the statute doesn't require something, neither will the regulations. The issue of the cost of Federal mandates is addressed in P.L. 97-108, which requires that estimated costs of State and local implementation of proposed Federal laws or regulations be calculated before final action is taken. The cost information will be developed by the Congressional Budget Office. Some would go a step further and require that if the Federalp Government decides that a compelling national concern requires action, then the Federal Government should absorb the costs. In a recent Supreme Court decision, the Court ruled that the States cannot be forced to spend large sums of money conforming to "vague" Federal requirements affecting treatment of retarded persons. Justice Rehnquist wrote that "... if Congress intends to impose a condition on the grant of Federal moneys, it must do so unambiguously. By insisting that Congress speak with a clear voice, we enable the States to exercise their choice knowingly, cognizant of the consequences of their participation." some argue that the regulations attached to Federal assistance programs are necessary to ensure that programs be administered according to precepts of fiscal integrity, equity, and national purpose; and that regulations are a necessarily detailed means of guaranteeing the proper implementation of federally funded activities. Others argue that the programs have led to a "regulatory thicket," to "red tape," and to a "paperwork burden." They find regulations so burdensome that they would rather go without Federal assistance than comply with the regulation. They support such approaches as block grants, revenue sharing, certification of compliance, and increased reliance on performance standards rather than explicit administrative requirements. ‘ Much of the conflict described above related to regulations or mandates affecting the activity of State or local governments. Federal regulations also affect the private sector, and there are some indications that these regulatory activities may be decentralized to the States. This would mean that enforcement of Federal regulations affecting the environment, health, and safety would be a State, rather than a Federal responsibility. STATE AND LOCAL DISCRETION CRS-lO IB8lO44 UPDATE-O5/l7/82 Many of those who object to the current Federal role in thr intergovernmental system recognize that this growth took place with the somtimes tacit, sometimes express consent of State and local governments. They would now urge these governments to regain the discretionary authority they have given up by accepting greater responsibility and by resisting what is described as Federal "coercion and encroachment." Proponents of this View have made a number of recommendations for actions that would increase State and local discretionary authority: (l) Public interest groups representing State and local elected officials in Washington should reorder their lobbying priorities. Implementation of this proposal is in progress at the Academy of State and Local Government (formerly the Academy for Contemporary Problems), which is establishing a Legal Center with the following objectives: Assist state and local government associations in developing a legal strategy to protect the interests of State and local governments within the federal system; Monitor Supreme Court decisions for their long-run implications for State and local governments; Monitor upcoming cases for their implications for State and local interests; Assist State and local attorneys to prepare their cases; and On request, help provide counsel and representation on behalf of State and local authorities. (2) State and local governments should create a "legal defense fund." (3) State legislatures should enact laws prohibiting State officials from entering into a grant—in—aid program that requires designation of a single State agency, prescribes the qualification of State employees, or prescribes advisory or oversight commissions having particular ideological biases. (4) Congress and the Administration should act to ensure that Federal‘laws do not preempt state laws and policies. (5) Enactment of S. 412 would provide for judicial review of Federal agency decisions that are not consistent with local, regional, or State development plans and programs. (6) Each proposed Federal law should be required to contain a "Federalist footnote," an explicit explanation to the public of why the proposal is a matter of Federal concern and why it should CRS-ll A IB8lO44 UPDATE—O5/l7/82 not be addressed at the State and local level. (7) Provide the States with a spokesman in the executive a branch of the Federal Government who can protect their interests when administrative decisions are made. (8) A constitutional sunset process for all Federal legislation, allowing the States, by petition of two-thirds of the State legislatures, to sunset any piece of Federal legislation, other than laws relating primarily to defense and foreign relations. Some, if not all, of these proposals would be objectionable to those who support the current alignment of powers in the federal system. They would argue that the actions that defenders of State and local. governments characterize as "coercive" are in fact, necessary responses_ to neglect or ineptness on the part of those governments. The conflicting ‘attitudes here are illustrated in 1965 dialogue between Representative Goodell of New York, and Secretary of Health, Education, and Welfare Anthony J. Celebrezze: "What makes me tear my hair in frustration is when you say there are no controls," Mr. Goodell said. "Mr. Goodell, you call it controls; I call it objectives," Mr. Celebrezze replied. This l5-year-old exchange will undoubtedly be echoed in contemporary debate on the issue of State and local discretion. ’ LEGISLATION H.R. l8 (Bolling et al.) To establish a Commission on More Effective Government. Directs the Commission to recommend methods to improve the relationships between Federal, State, and local governments. Introduced Jan. 5, l98l; referred to Committee on Government Operations. P.L. 97-108, H.R. l465 State and Local Government Cost Estimate Act of l98l. Requires the Congressional Budget Office to estimate the costs incurred by State and local governments in carrying out every significant bill or resolution reported in the House or Senate. Introduced Jan. 28, l98l; referred to Committee on Rules. Reported to House (H.Rept. 97-353) Dec. 3, l98l; passed House Dec. 8, l98l. Referred jointly to Senate Budget and Governmental Affairs Committees Dec. 10; discharged by voice vote Dec. 16; passed Senate Dec. 16. Signed by the President (P.L. 97-108) Dec. 23, l98l. H.R. 3401 (Bailey) Federal Assistance Reform Act of l98l. Reforms the laws relating to the provision of Federal assistance in order to provide State and local governments with greater flexibility in managing programs and projects using such assistance. Introduced May 4, l98l; referred to Committees on Government Operations and Rules. [Similar bills: H.R. 3680 (Heftel and Moffett) and H.R. 4455 (Daub).] S. 10 (Roth and Eagleton) To establish a Commission on More Effective Government. To study, among other things, the nature and extent of activities of the Federal, State, and CRS-l2 IBSIO44 UPDATE-O5/l7/82 local governments and the relationships between all such governments, giving particular attention to the extent to which their contributions would be greater or could be more efficiently made if they were differently distributed among the various governments involved or if the relationships between such governments were differently structured. Introduced Jan. 5, l98l; referred to Committee on Governmental Affairs. Reported to Senate (S.Rept. 97-I79) Aug. l3, l98l. Passed Senate Dec. 7, l98l. S. 45 (Sasser et al.) Federal Assistance Reform Act of l98l. Reforms the laws relating to the provision of Federal assistance in order to provide State and local governments with grater flexibility in managing programs and projects using such assistance. Introduced Jan. 5, l98l;; referred to Committee on Governmental Affairs. Hearings held by Subcommittee on Intergovernmental Relations Mar. 25 and Apr. 22, 1981. S. 412 (Tower) Intergovernmental Cooperation and Judicial Review Act of l98l. Provides for judicial review of Federal agency decisions that are not consistent with local, regional, or State development plans and programs identified during the A~95 review and comment process. Introduced Feb. 5, l98l; referred to Committee on Governmental Affairs. S. 660 (Boren) Family Welfare Demonstration Program Act. Establishes a period of 5 years during which States could either continue to operate under; current Federal AFDC requirements or could elect to conduct a block-grant demonstration project. Introduced Mar. lo, l98l; referred to Committee on Finance. S. 675 (Thurmond et al.) Federal Jurisdiction Review and Provision Commission Act. Establishes a Commission to study the relevant aspects of Federal and State court jurisdiction, including problems of substantive law, civil and criminal procedure, worload and caseload of the courts, case processing and State and Federal bars. Introduced Mar. lo, 1981; referred to Committee on the Judiciary. S. 807 (Roth et al.) Federal Assistance Improvement Act. Facilitates the consolidation of Federal assistance programs; extends the law relating to intergovernmental cooperation to permit greater flexibility in the use of certain Federal assistance funds; improves the audit process; simplifies and standardizes policy requirements generally applied to Federal assistance programs; and expedites the processing of applications for Federal assistance involving more than one grant. Introduced Mar. 26, I981; referred to Committee on Governmental Affairs. Reported to Senate (S.Rept. 97-136) with an amendment in the nature of a substitute May 21, 1981. Reported to Senate (S.Rept. 97-267) with an additional amendment and without recommendation. S. 853 (Moynihan) welfare and Medicaid Fiscal Assistance Program Act of 1981. Provides that the Federal Government will gradually take over the local share of AFDC CRS-13 IB8l044 UPDATE-O5/l7/82 benefit requirements. Introduced Apr. 1, 1981; referred to Committee on Finance. HEARINGS U.S. Congress. House. Committee on Government Operations. Current condition of American federalism. Hearing before a subcommittee, 97th Congress, lst session. April, May, June, and October 1981. Washington, U.S. Govt. Print. Off., 1981. 809 p. «r U.S. Congress. Joint Economic Committee. Subcommittee on Economic Goals and Intergovernmental Policy. Block grants and the intergovernmental system. Hearings, 97th Congress, lst session. July 15 and 22, 1981. Washington, U.S. Govt. Print. Off., 1981. 253 p. U.S. Congress. Senate. Committee on Governmental Affairs. Subcommittee on Intergovernmental Relations. Federal assistance reform. Hearings, 97th Congress, lst session, on S. 45 and S. 807. March 11, 25, and April 22, 1982. Washington, U.S. Govt. Print. Off., 1982. 485 p. ----- Fiscal notes for State and local governments. Hearing, 96th Congress, 2d session, on S. 3087 and S. 2691. Sept. 4, 1980. Washington, U.S. Govt. Print. Off., 1980. 39 p. ----- Intergovernmental relations in the 1980s. Hearings, 97th Congress, lst session. Washington, U.S. Govt. Print. Off., 1981. 424 p. U.S. Congress. Senate. Committee on Rules and Administration. The Federal Assistance Improvement Act of 1981. Hearing, 97th Congress, lst session, on S. 807. Nov. 2, 1981. Washington, U.S. Govt. Print. Off., 1981. 60 p. REPORTS AND CONGRESSIONAL DOCUMENTS Durenberger, Dave. Balance the budget by changing the role of government. Congressional record [daily ed.] v. 128, Feb. 10, 1982: S683-S687. Hamilton, Lee H. Thoughts on federalism. Congressional record [daily ed.] v. 128, Jan. 25, 1982: E35-E36. ----- The new federalism. Congressional record [daily ed.] v. 128, Feb. 10, 1982: E364-E365. Hart, Gary. New federalism. Congressional record [daily ed.], V. l27, Dec. ll, l98l: S. 15112-Sl5ll3. Levitas, Elliott H. Federalism. Congressional record [daily ed.] v. 128, Jan. 27, 1982: H73-H74. Local Government Fiscal Note Act of 1981; Senate debate. Congressional record [daily ed.], V. 27, Dec. 16, 1981: O'Nei .S. CRS-14 IB8lO44 UPDATE-O5/l7/82 Sl55l8-Sl5522. ll, Thomas P., Jr. National Governors‘ [daily ed.] v. l28, Remarks of Speaker Thomas P. O'Neill, Association. Congressional record Feb. 23, l982: S983-S986. Jr., The 1982 Joint Govt. Print. Off., Joint Economic Committee. Washington, U.S. Congress. Economic Report. l982. 265 p. Congress. Senate. Committee on Environment and Public Works. Federal-state relations in transition: implications for environmental policy; a report prepared by the Congressional Research Service of the Library of Congress. February 1982. Washington, U.s. Govt. Print. Off., 1982. At head of title: 97th Congress, 2d session. Committee print. 99 p. Congress. Senate. Committee on Governmental Affairs. Federal Assistance Improvement Act of l98l. Washington, U.S. Govt. Print. Off., l98l. 85 p. (97th Congress, lst session. Senate. Report no. 97-136) Congress. Senate. Committee on Rules and Administration. Federal Assistance Improvement Act of l98l. Washington, U.S. Govt. Print. Off., l98l. 26 p. (97th Congress, lst session. Senate. Report no. 97-267) President, l98l -— (Reagan). The State of the Union; address by the President of the United States. Congressional record, [daily ed.] v. 128, Jan. H51-H55. 26, 1982: CHRONOLOGY OF EVENTS 02/23 02/08/82 02/04/82 02/01/82 01/26/82 12/23 /82 National Governors‘ Association adopted a, "compromise" federalism proposal supporting Federal take-over of Medicaid, deferring consideration on AFDC and food stamps. FY83 Budget proposes seven new block grants, expansion of three existing ones, and reductions in funding levels for many grants—in-aid. Senate Committee on Governmental Affairs holds hearing on New Federalism. President Reagan meets with Members of Congress and Governors, says that details of the New Federalism proposal are negotiable. President Reagan, in his State of the Union message, proposed a major reshaping of the fiscal relationship between the Federal Government and the States. /81 H.R. l465 signed by the President (P.L. 97-108). 12/16/81 12/07/81 12/04/81 ll/09/81 ll/O9/81 ll/O5/81 08/13/81 05/21/81 04/20/81 04/08/81 04/07/81 -- O4/Ol/81 CRS-l5 IB8lO44 UPDATE-O5/l7/82 State Local Coalition issues statement of principles and for "partnership federalism"; calls for Domestic Summit on Federalism. S. ld passed Senate. Democratic Governors met with the Senate minority leadership to discuss budget cuts and shifts of program responsibility to the States. In an interview, President Reagan expressed his opposition to a "sorting out" of intergovernmental functions that would place responsibility for welfare programs at the Federal level, and indicated that Federal aid would be further reduced in FY l983. S. 807 reported out of Senate Committee on Rules and Administration with an additional amendment and without recommendation. Governors urge three-year moratorium on cuts in Federal grants and called for a domestic economic summit to sort out responsibilities for government programs; hearing before Senate Intergovernmental Relations Subcommittee. President signs the Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35), which creates 9 new block grants. S. 43 and S. 807 reported out of committee. Supreme Court rules in the Pennhurst State School v. Halderman decision, that the States cannot wlegislators, be forced to spend large sums of money conforming to vague Federal laws governing the treatment of the retarded. President Reagan signed an executive order (E.O. 12303) creating a Presidential Federalism Advisory Committee chaired by Senator Laxalt and composed of governors, local officials, Members of Congress, and private citizens. The function of the committee is to provide for full and adequate input on Federal legislative proposals impacting States and localities; State ‘advice in implementing the Administration's federalism proposals; and assistance in developing long-term policies to reverse‘the current trend of greater control over State and local programs by the Federal Government. House Subcommittee on Intergovernmental Relations opens a series of hearings on current condition of American federalism. 0 Legislation introduced authorizing Federal assumption of Medicaid and welfare costs. » O2/18/8l -- Reagan Administration's Budget Reform Plan proposed cns-15 IB8lO44 UPDATE-O5/l7/82 consolidation of nearly lOO narrow categorical grant programs into a few flexible block grants for State and local support of education, health, and social services. Consolidation would be accompanied by funding reductions estimated to exceed $4 billion by FY83. O6/20/80 -- Advisory Commission on Intergovernmental Relations adopts an "Agenda for the 1980s," calling for decongestion of the grant-in-aid system; reduction of the regulatory burden; strengthened political parties; preservation and renewal of State-local discretionary authority; a convocation on federalism; and clarified and improved methods to amend the Constitution. ADDITIONAL REFERENCE SOURCES American Legislative Exchange Council. White paper on new federalism; the ALEC alternative. Washington, 1982. l2 p. Barfield, Claude E. Rethinking federalism: block grants and Federal, State, and local responsibilities. Washington, American Enterprise Institute, l98l. 99 p. Beam, David R. Washington's regulation of States and localities: origins and issues. Intergovernmental perspective, v. 7, Summer l98l: ,8-l8. Breakthrough seen on New Federalism plan. National journal, v. l4, May 8. 1982: 826. Davis, Albert J. and John Shannon. Stage two: revenue turnbacks. Intergovernmental perspective, v. 7, Spring l98l: l8-25. Domenici, Pete V. We can save the ‘new federalism.‘ Washington post, Apr. 21, 1982: A25. Durenberger, Dave. About those obituaries for the ‘new federalism.‘ Washington post, Apr. 16, 1982: A29. Lincoln Institute of Land Policy. American federalism in the l980s: changes and consequences; conference summary and papers. Cambridge, Mass., l98l. 76 p. Mathews, Jay. States unable or unwilling to shoulder 'federalism' burden. Washington post, Feb. 17, 1982: Al, A4. Pilcher, Dan. Sorting out the federal system: the prospects; the choices. State legislatures, v. 8, February 1982: 7-18. Schuster, Benjamin R. American federalism: what has changed and what has endured. State legislatures, v. 7, September 1981: 21-25. ~ Stanfield, Rochelle L. and others. Reagan's New Federalism: Trojan horse or gift horse. National journal, v. l4, Feb. 27, 1982: 356-383. CRS—l7 IB8l044 UPDATE-O5/17/82 W A series of articles. ( State and local government in trouble; special report. ,Business week, no. 2711, Oct. 26, 1981: 135-181. Stenberg, Carl W. Federalism in transition: 1959-79. UOSQ ‘Analysis H.) Intergovernmental perspective, v. 6, Winter 1980: 4-13. Advisory Commission on Intergovernmental Relations. Changing public attitudes on government and taxes; a Commission survey. Washington, U.S. Gevt. Print. Off., 1981. 41 p. The Federal role in the federal system: growth. [In Brief] Washington, U.S. 1980. 145 p. the dynamics of Govt..Print..Off., an assessment and summary and concluding observations. The intergovernmental grant system: proposed policies; (A-62) Washington, U.S. Govt. Print. Off., 1978. 82 p. 1981: a threshold year for federalism. Intergovernmental perspective, v. 8, winter 1982: 4-41. Executive Office of the President. Office of Management and Budget. Federal aid to state and local government. (The Budget of the United States Government, 1983. Special Washington, U.S. Govt. Print. Off., 1982. 40 p. Major themes and additional budget details; fiscal year 1983. Washington, U.S. Govt. Print. Off., 1982. Statement Of David A. Governmental Affairs, Stockman before the Committee on U.S. Senate. Washington, 1982. 28 p. General Accounting Office. policy and fiscal relations. Govt. Print. Off., 1979. Perspectives (GGD-79-62) 47 p. on intergovernmental Washington, U.S. President, 1981 (Reagan). report from the President. 1981. 36 p. Federalism: the first ten months; Washington, U.S. Govt. Print. Off., a