New federalism: back to the drawing board
President Reagan's ''new federalism'' initiative, so the press reports out of Washington have it, is for all practical purposes dead, basically unlamented, and perhaps soon to be forgotten. But is it in fact a lost cause? Many governors and governmental experts are agreed that federal and state relations have become too cumbersome, and that there is an urgent need for greater rationality in the existing structure of programs.
With the White House and the governors at an impasse over the administration's proposal to transfer food stamps and welfare to the states in return for a federal assumption of medicaid, it should not be forgotten that there is still substantial support within the US for a transfer of many other programs back to the states. Indeed, the original administration plan called for the transfer not only of welfare (now strongly opposed by the governors), but of some 43 additional functional programs, comprising 124 categorical grants. These include such programs as roads, job training, education, mass transportation, and airport grants, to name just a few. Nor should it be overlooked that the same opinion samplings that indicate broad support for ''devolution'' also find most Americans believing the federal government more capable of taking care of ''poor people'' than the states--a factor that lends credibility to the stance of governors opposing a takeover of welfare but does not support the view that decentralization should be scrapped.
Few responsible persons had expected congressional action on the federalism issue this year, given the need first to put together a fiscal year 1983 budget, not to mention the interruptions occasioned by the elections this November. A Senate committee, as a matter of fact, has to date held only limited hearings on federalism, with governors expected to testify sometime later this year. Committee sources say that the governors will still be asked to present their views.
As noted on this page before, there have always been serious objections to turning welfare programs over to the states. The reason is that inequities could quickly arise between states and regions over both the extent of state funding and scope of coverage. Such fundamental differences could lead to the type of situations that occurred in years past, when persons from low-benefit states flocked to areas like New York that were generous in their support of the poor.
Still, it would be unfortunate if the great debate on federalism were to be ended before it got started. The ultimate objective should be to identify ways of making government as efficient and cost-effective as possible. For that reason, the White House and the nation's governors should use the next few months quietly to rethink their respective positions and then return to the drawing board to come up with fresh proposals. There has never been a need for haste. There is a genuine need, however, to bring order to a governmental system that has grown so big and complicated over the years that not even US budget directors are always certain where the tax dollars are flowing.