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Summary
The structural or institutional framework of our fed-
eral system of government demands little explicit atten-
tion from policymakers in the abstract; its importance,
however, increases in the context of how it deals with
the substantive problems of society. It is in this con-
text, the relationship between societal problems and
institutional capacity, that the Committee on National
Urban Policy initiated its look at American federalism.
In its earlier report, Rethinking Urban Policy, the
committee analyzed the major structural changes that
have been transforming the economy, in essence a shift
from an economy based on manufacturing to one based on
information and services. This shift emphasizes human
capital over physical capital as well as the need for a
well-educated, highly skilled work force. This economic
transformation is changing the nature of work itself and
thus, eventually, the economic role of cities. The com-
mittee concluded that the impact of economic change is
the major force to which urban policy must respond.
And, within that context, a federal system sufficient to
meet the challenges and opportunities of the new economy
is essential.
Paul Ylvisaker stated the major purpose of the sympo-
sium in his opening remarks: To examine the framework
within which this nation and its cities are expected to
adjust to vastly different economic challenges and po-
litical demands.. He noted that the current framework
of decision making, called the New Federalism, is based
on the Revolution of responsibilities and decision-mak-
ing authority for many domestic policies from the
national to the state and local levels of government.
He raised the major questions: Does this current trend
toward decentralization provide the most effective
1
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response to the challenges we face? Will revolution
mitigate the effects of national problems? Will it
encourage innovation and creativity? What are the con-
sequences of decentralization to state and local govern-
ment?
These questions were expanded into five substantive
issues:
1. Urban Economic Development
· What adjustments, if any, will have to be made in
the federal system to facilitate the development and
execution of urban economic development strategies in
the context of the transition to an economy more heavily
based on knowledge and service industries?
· What changes are required in the institutions of
the federal system to deal effectively with urban em-
ployment problems?
· What role can states play in assisting urban econ-
omies and in formulating national economic policy?
2. Education
· What will each level of government have to do to
enable the urban educational system to prepare young
people effectively for the labor force of the future?
What major changes in the fiscal and functional respon-
sibilities of federal, state, and local educational
agencies are required?
· Are the states institutionally capable of bringing
about reforms in the educational system to teach what
will be needed in the future and to meet the basic skill
requirements of urban work forces?
3. The Courts
· How have the courts defined federalism over the
past several decades?
· Have changes in constitutional law had an impact on
urban policy?
4. Access and Redistributive Policies
· What has been the effect of changes in federal aid
and domestic program funding on urban minorities and
interests?
· What seems to be happening with regard to how
minorities and other groups perceive the fairness of the
urban political and economic system?
5. The Concept of Partnership
· Are the states responding to the needs of urban
residents and filling the voids created by reductions in
federal assistance and involvement?
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· How has the New Federalism affected state and local
relations?
· What roles can the private and independent (private
nonprofit) sectors play in the urban service system?
0 Are public-private partnerships a viable response
in a more decentralized federal system?
· What important ideas should be investigated with
regard to the production and provision of urban
services?
No attempt was made to reach definitive conclusions
on these issues: Rather, the intent was to illuminate
and form an agenda for research and action on what
seemed to be the more critical points of federal-state-
local relations. Discussion of federalism took place
within the context of substantive public policies,
because the structure and process of intergovernmental
relations affect the achievement of social goals. This
volume represents the responses of the symposium partic-
ipants to these issues. In addition to this summary of
the symposium proceedings, the volume includes 10 papers
that focus on the essential issues.
WHAT IS FEDERALISM?
If the participants agreed on one thing, it was that
there is no coherent, consistent meaning of federalism
that enjoys a broad consensus. This lack of clear defi-
nition may have major implications for urban areas and
how they fare under a federal system. In his paper on
The Supreme Court and the Federal System,. Royce Hanson
explains that: Win the absence of any hardened theory in
the constitution of federalism, presidents, congresses,
and courts can choose their own favorite recipes from an
eclectic menu of constitutional and political concepts..
A wide range of choices is available, by some counts
more than 250 separable definitions; among the more
memorable are: (1) Mythic federalism.--a romantic
notion whereby the states can limit the power of the
federal government; (2) Dual sovereignty.--whereby
clear authority and the Tenth Amendment protect the
states from federal incursion; (3) Cooperative federal-
ism.--which allows Congress to play an Anything goes.
theme under the guise of providing incentives to state
and local government; (4) Active nationalism.--which
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demands judicial restraint and disregards any barriers
to the pursuit of national objectives; (5) benign fed-
eralism.--which maintains the importance of states in
the system and the need to give them latitude to proce-
durally reduce the overloading of the national govern-
ment; and (6) Functional federalism.--which relies on a
logical sorting out of responsibilities to clarify and
improve federal and state roles.
The symposium participants added several other defi-
nitions: Collaborative federalism.--which views the
private sector as an active partner in policy execution
and service delivery; and Ode Facto. New Federalism--
which is a redefinition of federal-state relationships
and a sorting out of roles and functions because of
fiscal necessity.
Finally, the current concept of the New Federalism as
conceived by the Reagan administration was articulated
by representatives of the administration:
· To promote economic recovery;
· To strengthen the national government to perform
its essential functions, e.g., national security and
basic social insurance programs;
· To devolve domestic programs to state and local
governments to increase responsiveness to diverse condi-
tions;
· To strengthen state and local governments; and
· To stimulate private and public sector coopera-
tion.
This conception also includes: (1) recognition of
the federal responsibility for truly needy people and
enforcement of civil rights; (2) recognition of dispari-
ties among people and regions and the need for a contin-
uation of certain urban programs, e.g., Community Devel-
opment Block Grants and urban development action grants;
(3) the need for block grants to provide states and
local governments with flexibility to set priorities
within broad constraints; and (4) commitment to economic
growth to alleviate social and economic distress.
THE NATIONAL IDEA VERSUS DEVOLUTION
There is an inherent conflict between the concept of
nationhood and the theory of federalism. It pits cen-
tral authority against state and local autonomy, unifor-
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mity against diversity, and national initiative against
local action. These are not only conflicts of dichoto-
mous theories, but also pragmatic considerations that
collide when government must act.
The tenets of federalism provoke considerable de-
bate. A major point of conflict revolves around the
definition of national interest. At the symposium, one
critique was put forth by Hubert Locke: Federalism has
assumed, historically, some attempt to achieve and main-
tain a unitary national experience. The New Federalism
carries with it the implicit notion that with respect to
the vast field of domestic policy, we can afford 50 sep-
arate political systems while the federal government
concerns itself chiefly with items of national
security.. The struggle between centralization and
decentralization was evident throughout the symposium.
The notion of decentralization embodied in the con-
cept of the New Federalism was accepted, yet tempered by
concern that a federal government retreat from an urban
agenda could create a void that may not be filled by the
states. Fiscal pragmatism and recognition that the size
of the federal deficit would preclude large domestic
policy initiatives, however, led many to concede that a
reduced federal role was inevitable, at least for the
short term.
The overriding concern of many is the need to articu-
late more clearly the division of responsibilities be-
tween the national government and state and local gov-
ernments, particularly in domestic matters. This was
best expressed by Robert Graham, governor of Florida and
a major speaker at the symposium: While I am genuinely
pleased with the capacity and willingness of states to
accept their new responsibilities in the pragmatic fed-
eralism in which we are operating, there are issues that
require a national response. There are issues that can-
not be fulfilled in an appropriate manner on a state-
by-state basis..
Participants enumerated a number of issues requiring
national attention, including: immigration, foreign
trade policy, environmental protection (especially from
acid rain), interstate banking, and dislocated workers.
George Latimer, mayor of St. Paul, Minnesota, and also a
major speaker, agreed: ewe have to reaffirm and more
sharply identify those issues that require national in-
volvement..
Yet some argued that systemic change was required for
reasons other than ideological or fiscal justification
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for revolution. Latimer pointed out that the system
needed some innovation and that public officials have to
learn to deliver services more creatively and more
humanely, to allow more participation,
more community-based decision making.
An understanding did emerge, in the words of Ted
Kolderie, that Ha new idea-system. was needed. In his
paper in this volume, Changing Conceptions of Private
and Governmental Role,. Kolderie argues that there is
reduced confidence on the part of the public that issues
are best handled as national problems or as political
decisions. He raises the question of whether government
and its professional bureaucracies should be relied on
for many public services. Kolderie maintains that, as a
nation, we are in a transition from one set of theories
to another, but that mother types of action are simply
emerging without a theory to explain them: local action
rather than national action, private rather than govern-
mental, nonprofessional rather than professional, pro-
competitive rather than regulatory..
The symposium raised new possibilities but produced
no general strategy for dealing with urban problems. A
reduced national role was accepted, but there was no
agreement on the further reduction of the domestic re-
sponsibilities of the federal government. The increased
competence and capacity of state governments were recog-
nized, but there was no consensus on how the states
would use their new strength or on how well they would
perform in their pivotal position between the federal
and local governments.
The absence of a consensus was noted, not on scholar-
ly or philosophical grounds, but in terms of the effects
of a lack of definition in the question of social re-
sponsibility. Helen Ladd summarized the discussion of
social responsibility:
and to encourage
Although we have the capacity and the mechanisms
to effect redistribution, we are now choosing not
to do so. Some argue that there are private and
public groups with innovative ideas about spe-
cific programs and the proper locus of responsi-
bility for them. Others point out that we have
not supported those programs and groups the way
we should have and that the effect has been to
leave the poor like boats chained to the bottom
of the harbor during a rising economic tide with
little or no means to free themselves.
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The participants also examined political Revolution in
light of on-going structural changes in the U.S. economy.
As someone noted about increasing internationalization at
all levels of the U.S. economy, at the very time we are
decentralizing politically, we are moving into a global
economy with increased international competition. Some
observers have suggested that the nation is in the midst
of an economic upheaval akin to the industrial revolution
in scope, with no equal in modern economic history in the
speed with which the economic transformation is taking
place. The underlying questions are: What demands will a
changing economy place on political and social institu-
tions? How well equipped is an emerging federal system to
deal with those demands?
The relationship between new federalism and the economy
is most evident in urban economic development and educa-
tion. The committee's earlier analysis of the urban poli-
cy problems presented by an advanced economy was supple-
mented by the papers in this volume on urban education and
job training. The central issue is the capacity of the
federal system to produce educated, skilled, and techno-
logically competent workers at the entry level and to re-
train the existing labor force for the demands of a new
economy.
The problems of urban school districts and the capacity
of the federal system to respond to the pressures for re-
form are analyzed in the paper by Robert Andringa, ~De-
Facto New Federalism and Urban Education.. Although the
problems of urban schools are formidable, there are rea-
sons for optimism. States have undertaken new initiatives
to improve education, funds have been targeted to special
populations, and much is known about effective educational
policies and practices.
Job training and the roles of federal and state govern-
ments are much more problematic. Under administration
initiative, the Comprehensive Employment and Training Act,
a federal-local program of job training, was replaced with
the Job Training Partnership Act, a federal-state-local
program that places greater emphasis on the participation
of the private sector. Although this new program has only
recently reached the implementation stage and it is too
early to evaluate it, Gail Garfield Schwartz and Kenneth
Poole are pessimistic in their paper, The Significance of
the Job Training Partnership Act for Federal-State-Local
Relationships,. about the ability of state governments to
meet their responsibilities. Underfunding, unrealistic
goals and expectations, bureaucratic complexity, and the
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conflict between job training and job placement are poten-
tial issues in the success of the Job Training Partnership
Act.
Although the participants reached no consensus, they
did point out that major institutional changes are occur-
ring in the federal system and that private and nonprofit
sectors are far more deeply involved in both management of
the system and in developing linkages among previously
separate functions, such as employment and education.
FISCAL CAPACITY, INSTITUTIONAL RESPONSIBILITY,
AND THE CONSEQUENCES OF FEDERAL DEVOLUTION
The institutional effects of economic change are one of
the major issues currently affecting the federal system.
Other important issues considered by the participants
are: (1) fiscal capacity, (2) the size and scope of gov-
ernmental authority, (3) equity among groups and areas,
and (4) the consequences of reform.
The paper by John Shannon, Fiscal Federalism After the
California Taxpayers' Revolt,. provides the facts and a
forecast of fiscal federalism. The year of the California
tax revolt, 1978, marked the beginning of nationwide fis-
cal restraint. In that year, taxpayers' revolts reduced
federal aid, and recession led to the start of a great
slowdown in state and local outlays. Between 1978 and
1983, employment and expenditures of state and local gov-
ernments declined 1 percent in real terms. During the
same period, federal expenditures increased dramatically
due to deficits, defense spending, and social insurance
programs; federal aid to states and localities, as a per-
centage of their budgets, decreased from 26 percent to 20
percent. Spending and deficits have placed a squeeze on
domestic expenditures that is not likely to be released
soon. Shannon offered a startling illustrative statis-
tic: the federal budget deficit for fiscal 1983 was $24
billion greater than the tax collections of all 50 states
combined. Many agreed that we are outstripping federal
resources nationwide and that the most important thing
about federalism is that the federal government has no
money.
Another factor is the issue of the proper size and
scope of government. Questions about the allocation of
roles and responsibilities among federal, state, and local
institutions are overlaid by a more fundamental concern:
How much government is enough? The need for new perspec-
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fives on this question is suggested, not only by tax-
payers' revolts, which focused on fiscal issues, but also,
in the view of some observers, by a growing belief that
government should err, if at all, on the side of doing
less rather than more. Others argue that it is not simply
a question of how much is enough, but rather what role the
national government should play in the federal system.
The equity issue combines the fiscal and political fac-
tors: How should a federal system allocate its re-
sources? To what extent should it follow redistributive
policies that shift resources from those who have to those
who need, in terms of both people and places? The issue
of equity or fairness is, for many people, a basic test of
federal system effectiveness. Devolution to state and
local governments was seen by many as producing outcomes
for the urban poor and minorities that were less benefi-
cial than national policies and programs have been in the
past.
One theme of the symposium was the impact of recent
policies of the Reagan administration and their longer-
term consequences for urban areas and their residents.
Fred Doolittle reported on the results of a study of the
impact of federal aid reductions and the shift to block
grants. The decline in federal aid, which began during
the Carter administration, was accelerated in 1981 when it
was reduced an additional 12 percent in real terms. Con-
gress, however, has restored some of the program cut-
backs--aid was increased by 3 percent in 1982, 1983, and
1984. The effect of the budget cuts was ameliorated by
three factors: carry-over funding, the shifting of funds
among programs, and some state and local replacement.
Capital spending by state and local governments actually
increased, mainly as a result of the increase in the gas
tax for highway maintenance and construction. The major
conclusion was that shifts in federal aid programs and
funding levels are moderated as they work their way
through the federal system.
The major consequences of these federal aid changes
have been an increase in state control of resource alloca-
tion and more attention to state government by nonprofit
organizations and local officials. For example, it was
pointed out that community action agencies, which had not
previously established ties with the states, are now
scrambling to their state capitols to secure funding from
state-controlled Community Services Block Grants. With
respect to longer-term prospects, Doolittle reported two
quite divergent readings. One is that greater cutbacks
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are in the offing, since federal aid is highly vulnerable
given national budget priorities and pressures. Another
is that if the economy continues to improve, state fiscal
conditions may allow more replacement of federal dollars.
Significantly, the states have not responded to the
cutbacks in a uniform manner. The paper by John DeGroVe
and Barbara Brumback in this volume, State-Local Part-
nership: Problems and Possibilities,. points out the
varied policies of the states and the link among political
culture, fiscal health, and tradition in the states'
attitudes toward federal aid retrenchment. Doolittle
reported that, not surprisingly, ~liberal, wealthier
states are doing more to counter aid changes than are
poorer, conservative states.. He also discerned a pattern
of state reallocation of funds away from larger cities and
a tendency to spread resources among local jurisdictions.
The consequence of this diversity in state decision making
is to increase the differences within individual states
and among the states in how poor people are treated.
The concern for equity and the effect of these domestic
policy changes on the poor and minorities was a recurrent
theme of discussion and comment. Dale Rogers Marshall and
John J. Kirlin reviewed the politics of redistribution in
their paper, The Distributive Politics of the New Federal
System. Their historical perspective provides a cau-
tionary note to the critics of recent policies. In the 20
years prior to the Reagan administration, Redistribution
gained prominence on the political agenda. But the amount
of redistribution that actually occurred was more modest
than commonly recognized.. In effect, rhetoric and reali-
ty were again mismatched. Past federal policies have
helped reduce poverty and disparities among regions, but
not to the extent most perceive. Reagan's policies have
Somewhat decreased redistribution to lower income
groups,. but not to the extent his opponents have
claimed. Marshall and Kirlin conclude: Opponents said
that Reagan would dismantle all gains of the welfare
state. The extreme predictions of both sides--overstated
for understandable political reasons--have been proven
wrong. In this case, as Marshall and Rirlin argue, The
theory base of social policy has shifted more than the
distributive impacts..
Astrid Merget addressed the issue of equity and equal
opportunity in relation to the courts and service deliv-
ery. Her remarks provide a more severe view of recent
events. She saw the public value of equity. as one that
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is now misunderstood, ill-defined, and threatened. The
public mood has shifted away from policies that ostensibly
redress wrongs. The courts are less inclined to check
actions that diminish equity and reduce equality. Dimin-
ished resources have made it more difficult or less toler-
able to redistribute downward to lower income groups.
Mer get concluded that The conducive conditions that
allowed us to pursue and champion the cause of equity seem
to have disappeared..
In response to concerns about fiscal capacity and equi
-
ty, Robert Carlson, from his perspective as a former
Reagan White House urban policy aide, stated that cuts in
the federal income tax enabled states and local govern-
ments to raise their own taxes and to finance their needs
from their own sources. Harold Wolman countered that the
tax systems of subnational governments are inherently more
regressive than those of the federal government. State
and local taxes fall more heavily on lower income groups;
fiscal Revolution may impose a greater burden on those
with the least capacity to pay.
Wolman's paper, National-Urban Relations in Foreign
Federal Systems, shows that the U. S. system of federal-
state-local relations is quite different from its counter-
parts in other countries. HiS survey of several coun-
tries, both federal and unitary in structure, reveals that
With the exception of the United Kingdom, direct nation-
al-local relations of the sort that are prevalent in the
United States are rare; the federal government interacts
with urban governments primarily through state govern-
ments.~ Yet those federal-state relationships are more
authoritative than found in the United States. State-
local responsibilities are more explicitly spelled out,
and tax systems are mandated to provide for equalization
among communities. Wolman found that the strongest con-
trast between other countries and the United States His
the degree to which [they] incorporate equalization fac-
tors in their distribution formulas. Indeed, equalization
is an explicitly stated objective of the grant system in
many of these countries..
RESPONSES TO NEW FEDERALISM
Questions about the New Federalism considered by the
participants include: What is the capacity and commitment
of state governments? Are cities finding new ways to cope
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and manage? Are public-private partnerships an effective
response? What have been the effects on nonprofit organi-
zations?
In their paper DeGrove and Brumback assert: The
states have emerged as chief partners in the federal sys-
tem from whom local governments can expect a favorable
response to local needs.. Governor Graham traced the in-
creased capacity of his state to the reapportionment wave
of the 1960s, which has produced new institutions, organi-
zational maturity, and competent internal staff. Accord-
ing to Graham, estates are in an advantageous position in
terms of their capability to accept the new responsibil-
ities imposed upon them by federal fiscal constraints.
Of the three dimensions of state capacity--managerial,
fiscal, and political--there was general acceptance of
improved state managerial or organizational competence.
Fiscally, many states are in much better condition than
they were a few years ago.
However, according to John
Shannon, star and expenditure limitations, the memory of
the tax revolt, and public opposition to government expan-
sion,. will continue to restrain state spending.
It was the political capacity or commitment of the
states that was most disputed. The dispute was sharply
drawn in the two papers on state-local relations. While
the authors relied on the same data source to assess rela-
tionships in eight states and cities, they reached very
different conclusions about the state response. DeGrove
and Brumback take a relatively optimistic view of the
states, while Wood and Klimkowsky see little prospect for
improvement in the state urban record. These divergent
findings are explained partly by a difference of focus--
the first paper looked at more generalized state-local
relations, while the second concentrated on the relation-
ship between large cities and states.
Robert Wood and Beverly Klimkowsky's analysis of eight
cities, Cities in the New Federalism,. found: The
cities turned inward to their own resources and authority,
launched few sustained drives for outside help from the
states; entered into few agreements that compromised their
power to decide and to allocate.. While clearly such tra-
ditional responses to austerity as budget cutting, service
reductions, and employee layoffs have been prevalent,
other observers see a new entrepreneurial role on the part
of cities. Chicago was cited as one example of a city's
procurement dollars being used to increase minority hiring
and aid small businesses. Philadelphia was cited as a
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city working with its suburbs to improve mass transit and
tax policies in the region.
In contrast, DeGrove and Brumback looked at the experi-
ences with federal cutbacks of eight states and discovered
that state responses ranged inconsistently from additional
cutbacks at the state level to replacement of lost federal
funds through state and local legislative action. In ad-
dition, the fiscal responses of each state were occasion-
ally contradictory.
California, for example, increased
financial aid to local governments after the passage of
Proposition 13 and also transferred some fiscal responsi-
bilitY for medically indigent adults
^ -I to the counties.
Evidence at the state level supports few generalizations
about federalism. While the authors are optimistic that
states will continued to evolve as strong actors in the
federal system, events such as recession and subnational
political change have overshadowed changing practices of
federalism.
Mayor Latimer of St. Paul provided several examples of
innovative programs involving the private sector and foun-
dations in the areas of job training and employment, ener-
gy conservation through district heating, and new and
rehabilitated housing. According to Latimer, Owe have
just begun to enter into public-private partnerships in
cities, and it is absolutely essential from an economic
standpoint that we continue to increase our interactions
with the private sector..
There was, however, some skepticism over the contribu-
tion that public-private partnerships can make to urban
problems and the needs of poor people and minorities. The
point was made that joint ventures can be expensive, since
the private sector demands a return on investment and
there may be little profit in meeting the toughest prob-
lems or reaching those most difficult to serve. Yet it
was also acknowledged that joint ventures designed to
solve part of the problem--for example, finding innovative
ways to reduce housing costs for low-income and middle-
income families--may not drain resources needed for other,
more difficult issues.
On balance, joint ventures between government and busi-
ness were viewed as a significant strategy for meeting
some of the needs of city residents. While such partner-
ships are increasing, however, the cutbacks in funding
have dramatically changed the role of some nonprofit orga-
nizations. Many nonprofit service providers relied heav-
ily on the federal government partner in financing their
programs.
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Blenda Wilson discussed the very difficult circum-
stances that nonprofit service providers now face. New
strategies are required to develop nonfederal sources of
revenue for community-based organizations. Nonprofit
organizations must now compete vigorously with each other
for funds from foundations and corporations. Many are now
forced to charge fees for the services they provide and,
as ~ result, find that their clientele has changed. Some
are no longer serving the poor and disadvantaged, but
rather the working class and those with insurance. Wilson
concluded her presentation by asking whether the New Fed-
eralism would not diminish rather than increase the
ability of communities and nonprofit organizations to cope
with current responsibilities. Partners, she argued,
should be people who care about the same things--and at
least one of the partners has to have some money to put
behind that caring.
CON CLUS ION
Throughout the symposium the future evolution of the
American federal system was debated. There were those who
suggested that current fiscal and economic trends and
growing political conservativism on the part of the Ameri-
can people would prolong and intensify the currently aus-
tere and difficult conditions. Others criticized such
gloomy forecasts as too short term in thought and too
reactive in response.
Some found the existing federal system to be incoher-
ent, confusing, and ill-defined, a system in which rheto-
ric and reality are continually mismatched, accountability
and responsibility are not fixed, and no single level of
government is in charge. They found this inchoate common-
weal to be particularly detrimental to cities and urban
areas. They regarded the inability to achieve a consensus
on national urban policy as a failure of the nation, as a
people, to respond to the needs and concerns of a minority
of the population--poor, minority, and disadvantaged
people.
Participants cited real concerns. Budget cuts have
reduced public services to the needy; states have cut back
their funding to the medically indigent and shifted the
burden of service provision to counties and cities; non-
profit organizations providing char itable and social ser-
vices have terminated programs, serving only those who can
pay, or, in some cases, have disappeared from their com-
munity. State and local governments are receiving less
f
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15
financial assistance, in real terms, from the federal gov-
ernment. Communities are more dependent on their own
resources, which are not equally distributed among juris-
dictions, to meet residents' needs. Redistribution has
been ~somewhat. decreased.
More disturbing to most was the unproven, or yet undem-
onstrated, capacity of this system--which might be termed
Muddled federalism.--to respond to dramatic and accelera-
ting changes in the economy. Educational challenges are
not being met, although significant, or at least numerous,
reforms are under way. New approaches to job training
have been initiated but are barely operational and have
yet to show that legislative policy can be put into
effective practice.
Despite the long litany of problems and unresolved
issues confronting the nation and its governmental system,
other people saw reasons for confidence. Mayor Latimer
expressed it well when he described the flow of immigrants
into the cities, as clearly Ha national opportunity and
not simply a local problem.. Perspective seems to be
all-important in public action.
Others argued that there is a basis for optimism in the
response of the institutional actors. The Reagan adminis-
tration has maintained many significant urban programs in
urban and community development. Congress has restored
funds to social programs. The states are more competent
now to manage in a devolved system and have shown a wil-
lingness to raise taxes and replace funds for vitally
important initiatives in transportation, education, and
community development. Cities are becoming more entrepre-
neurial, are developing effective partnerships with the
private sector, and are learning to use their own
resources more creatively. There is evidence, here and
there, of growing cooperation between central cities and
suburbs. Community-based organizations are facing hard
times, but many are responding with innovative strategies
and, at the same time, involving more people in their
activities.
Paul Ylvisaker provided an answer to the overriding
question of the future of the federal system when he
said: The national attitude cycles on the subject of
federalism. At times the nation centralizes, at times it
decentralizes.. He also implicitly revealed the virtue of
the federal system. Despite the conflict between the cen-
tripetal pull of the national government and the centrifu-
gal pull of state and local governments, there is an in-
herent capacity to adapt, to respond to problems in many
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different ways, and to show the potential for innovation.
The federal system does appear to mitigate the effects of
larger, national problems by allowing numerous political
entities to experiment, to adopt varied policies, and to
challenge, or if necessary to reject, single-source solu-
tions.
Recent debates about federalism have been preoccupied
with the question of sorting out, a process that would
impose some order and logic on federal, state, and local
roles. And yet the nation may be better off with an
unsorted system. Ylvisaker expressed the virtues of
unsorted federalism:
The federal system is at its best when all three
levels simultaneously are dealing with the same
concerns--competitively, intentioned, coopera-
tively. Whenever you see one level saying that
those concerns belong to that level and that
level alone, I think the vitality of the system
suffers.
The New Federalism may be a stage in the Transition
to a new set of ideas about the nature of public issues
and about the process of social action,. as Ted Kolderie
has speculated. Yet whatever new idea or theory
emerges, it is likely to continue to include the inevi-
table conflict between the allegiance to a national gov-
ernment and the respect for state and local loyalties.
Representative terms from entire chapter:
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