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New federalism ideas in wake of revenue sharing. Welfare is one candidate for federal, state reallocations

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In the summer of 1985 the Senate, House of Representatives, and Reagan administration all were trying to decide how to cut the federal budget. They disagreed sharply among themselves, except on one issue: Everyone conceded that revenue sharing could be eliminated once its authorization ran out on Sept. 30, 1986. After disbursing some $82 billion in 14 years, the revenue sharing program did, in fact, go out of existence at the end of last month. Efforts continue to be made to restore it.

But it is more likely that the next major efforts to shift the relationships between the federal government, on the one hand, and states and municipalities, on the other, will be through change in the nation's welfare system. Several study groups now are thinking through the issue.

One is an administration task force headed by Attorney General Edwin Meese; it is expected to make its recommendations by Nov. 1. The proposals are likely to include a phased turnover of much or all of the welfare system to the states, to be financed with federal grants designated for welfare expenses.

In addition, Sen. Daniel J. Evans (R) of Washington and other advocates will try to get the next Congress to make fundamental changes in the relationship between the federal government, the states, and the municipalities. Their proposal is an outgrowth of a study Senator Evans co-chaired with former Virginia governor Charles Robb. The plan would cause some jointly-administered domestic programs to be undertaken solely by the federal government, and others by states and municipalities alone, depending on whether the programs can most appropriately be conducted on a national or regional level.

It was not for want of effort by the states and cities that the revenue-sharing program expired last month. Throughout this year they fought an uphill battle in the House of Representatives to gain approval of a continuation of revenue sharing. In the end, however, the strenuous lobbying by the United States Conference of Mayors, the National Coalition to Save General Revenue Sharing, and other interest groups was in vain.

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