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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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2 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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3 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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4 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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5 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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6 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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7 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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8 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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9 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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10 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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11 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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12 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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13 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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14 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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16 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.