American Federalism, a New Partnership for the Republic

posed Medicaid cap is a warning of potential roadblocks from unified state and local opposition to a presidential proposal.

From the outset, there was strong opposition to the Medicaid cap proposal; NGA, NCSL, and NACO were especially forceful in their objections. No compromise could be reached. State and local officials, under the effective leadership of Governor George Busbee, lobbied vigorously against the cap, and it was defeated by Congress.

President Reagan is deeply committed to the quiet revolution of a New Federalism--returning the constitutional balance whereby there is forged a meaningful "partnership" between the federal, state, and local governments. Overall, he has achieved substantial early success. But efforts to realize further devolution will require reforming time and again the political alliance of state and local officials with the administration to wage political battle against the iron triangle.

Already there are strains. The president was more successful in winning budget cuts than in achieving all the flexibility he sought in block grants. And the serious economic problems we face require President Reagan to seek even deeper cuts in federal spending.

One commentator has said that the governors have their fingers crossed; so, too, do their fellow state and local officials ( Broder 1981). While most can agree on the ultimate objectives of more responsibility, authority, and revenue sources at the state and local levels, the ways and means will be precarious--forcing the administration to redouble its efforts to insure that these early positive federalism steps are not aberrations but a prelude to reforming our intergovernmental system, to correcting the existing imbalance, to again making government work.

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