CSF Associates Inc.

New Federalist no. 3

Author(s): Johannes Althusius
Source: Publius, Vol. 2, No. 1 (Spring, 1972), pp. 132-137
Published by: Oxford University Press
Stable URL: http://www.jstor.org/stable/3329514
Accessed: 06-07-2016 12:13 UTC

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
http://about.jstor.org/terms

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted
digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about
JSTOR, please contact support@jstor.org.

Oxford University Press, CSF Associates Inc. are collaborating with JSTOR to digitize, preserve and
extend access to Publius

This content downloaded from 131.170.6.51 on Wed, 06 Jul 2016 12:13:41 UTC
All use subject to http://about.jstor.org/terms
 NEW FEDERALIST NO. 3
Johannes Althusius*

The two Nixon Administration New Federalist essays which pre-

ceded this one-unlike the original Federalist papers-disagreed
sharply with each other. Not wanting to go against the tide, this
paper disagrees with the authors of both of these earlier papers, men
known to the Nation only as "Publius" and "Cato."
The analyses of these two young ancients are grounded in, and
primarily concern, the federal idea as expressed in the American
Constitution. This third New Federalist essay contends that a more
appropriate touchstone for understanding the domestic reforms of
the New Federalism is the explosion of American social policy in the
mid-1960's, which we know under the grand slogan-"Great Soci-
ety." Neither Publius nor Cato mention it at all. The heart of the
social reforms of the Nixon Administration is the re-establishment of
the political ideas of American federalism plowed under by the Great
Society.
While permitting central action to deal with national needs, a fed-
eral structure divides authority and responsibility to give scope as
well to regional (in our case State and community) problem-solving.
There are five large democratic federal systems in existence to-
day-Canada, Australia, West Germany, Switzerland, and the United
States. All five have changed significantly over time. For example,
economic policy and income maintenance have increasingly become
central government functions. Likewise, central government influ-
ence in other areas of domestic policy has grown by virtue of the
intergovernmental grant-in-aid mechanism.
Political philosopher Karl Lowenstein traces this gradual process
of centralization in the domestic policy of modern federal systems to
the adoption of growth-responsive income taxes by the central gov-
ernment. This is certainly true in the United States. The Federal
income tax, adopted in the World War I period, has since been con-
verted to widespread domestic uses.
* Johannes Althusius was a 17th century European political philosopher, who showed a
strong preference for democratic government in the federal form.

132
This content downloaded from 131.170.6.51 on Wed, 06 Jul 2016 12:13:41 UTC
All use subject to http://about.jstor.org/terms
 New Federalist No. 3 133

The critical question is whether the pattern of change in the fed-

eral idea is straight line or cyclical.
James L. Sundquist of Brookings has written recently on federal-
ism, in effect, constructing the philosophical base of the Great Soci-
ety approach, which he views as part of an "irreversible trend."
Sundquist regards the rapid increase in the number and scope of
Great Society social programs "as the final burial, perhaps, of tradi-
tional doctrines of American federalism that, for a long time, had
been dying hard."
The New Federalists are not ready to see the federal idea die hard.
Our essential argument is that the American governmental balance
must be readjusted and refined over time to preserve and enhance the
essential political values of federalism, which are:
* permits diversity among regions;
* allows flexibility in problem-solving;
* provides opportunity for experimentation and innovation; and
* expands opportunity for participation in political processes.
NEW FEDERALISM DEFINED

The three major purposes of the New Federalism approach of the

Nixon Administration are: (1) to reassess and sort out domestic gov-
ernmental responsibilities, (2) to reform and improve the perfor-
mance of those tasks which clearly belong to the central government,
and (3) to clarify the role of the Federal Government in areas in
which decision-making and administration are principally the re-
sponsibility of States and localities.
The basic problems to which these changes are addressed are
recognized by men located in diverse positions on the American
political spectrum. For example, Walter Lippmann observed critically
in the height of the Great Society period: "The fact of the matter is
that the country is too big to be managed and administered from
Washington." Former Senator Kenneth B. Keating of New York
State once characterized the scatter-shot pattern of domestic grants-
in-aid as "the Washington reflex." He said, "You discover a problem,
throw money at it, and hope that somehow it will go away."
DELIVER Y SYSTEM PR OBLEMS

The net result over the years of too many "Washington reflex"
actions has been the creation of what we now refer to euphemis-
tically as delivery system problems. (The Post Office is not the only
Department in Washington with such problems.)
Each narrowly targeted Federal grant-in-aid has its own interest
group. And each group presses for support of its particular function,
engaging the energies of administrators and legislators at all levels of

This content downloaded from 131.170.6.51 on Wed, 06 Jul 2016 12:13:41 UTC
All use subject to http://about.jstor.org/terms
134 Johannes Althusius

government. The resulting governmental arrangements make it

extremely difficult for chief executives at the State and local levels
to set and implement their own priorities. The result has been:

- A diminution of the initiating and innovative capacities of State and local

governments;
- A clouding of responsibility for action, or what might be called the "Who's
in charge" dilemma;
- A decline in support for State and local governing bodies, thus robbing
them of the necessary spark for reform and self-renewal; and
- A progressive incapacity to enforce priorities at a time when resources are
scarce.

In his Brookings book, Making Federalism Work, James Sundquist

recognizes the existence of delivery problems. He calls for a solution
under the banner of what has to be one of the most imprecise terms
in common usage, "coordination."
We New Federalists do not agree! The Administration's New
Federalism approach takes a quite different view-believing that
more basic corrective actions are needed than can be accomplished
by inter-agency improvisations, new regulations, more committees,
and program "synchronization."

REFORMS OF THE NEW FEDERALISM

The first time President Nixon used the phrase, New Federalism,
was in his August 8, 1969, television address to the Nation in refer-
ence to the Administration's revenue sharing plan.
The three other proposals in the August 8 address were:
1. The Family Assistance Program to replace the Nation's failing
welfare programs with a national system covering all low-
income families with children.
2. Reform of Manpower Training Programs to permit establish-
ment of comprehensive State and local programs oriented to the
needs of their clients; and
3. The redirection of OEO to take greater advantage of its poten-
tial in the area of social program innovation.

WELFARE REFORM

In examining the history of federal systems, it is not surprising

that the Nixon Administration selected the broad area of income
support as a major candidate for reform. (Administration proposals
in this area include Family Assistance, Food Stamp reform, a new
Family Health Insurance Plan for the poor and the overhaul of social
services.)
K.C. Wheare, the British historian of federal government who

This content downloaded from 131.170.6.51 on Wed, 06 Jul 2016 12:13:41 UTC
All use subject to http://about.jstor.org/terms
 New Federalist No. 3 135

analyzed the functions assigned to the central and regional levels of

government in federal systems, found strong centralist tendencies for
the income maintenance function. Referring to aid for the poor, he
said, "regulation by the general government is essential if any provi-
sion is to be made for all these classes of deserving citizens." He
noted further that "a substantial financial burden must rest on the
general government."
The reform of public welfare by the Nixon Administration fits
clearly into this pattern. In the process of "sorting out" functions,
we believe the income transfer function (paying money to people
throughout the country on an equitable and uniform basis according
to need) is appropriately an area for predominance by the central
government. I would argue further that eventually this responsibility
should be fully the job of the central (Federal) government for the
three functions of government-financing, policy-making, and admin-
istration.

REFORMS OF OTHER NATIONAL FUNCTIONS

The Administration's concern with the reform of domestic pro-

grams includes both those which are currently the exclusive responsi-
bility of the Federal Government and those which are predominantly
Federal.
Areas of exclusive Federal Government concern, where the
Administration has urged major reforms, are the Post Office and the
draft. Besides welfare, two areas in which a predominant Federal role
is warranted and which have also been the subject of Nixon Adminis-
tration reform proposals are higher education and the environment.
In the case of higher education student aid (an income transfer-
type program), the existing fragmented guarantee and loan programs
of the Federal Government are proposed to be standardized and tied
more closely together into an integrated system. Similarly, the
President's messages on environment make the case for stronger
national action on pollution control.
AREAS FOR "RESPONSIBLE DECENTRALIZATION"

On the other side of the coin of domestic reform, it is the Admin-

istration's position that in areas where the primary responsibility is
State-local, we must design and administer Federal programs so as to
increase opportunities for leadership, flexible action, and innovation
by the States and localities. Here, the Administration's aim is to
bring about "responsible decentralization" through program reform.
The areas affected by responsible decentralization reforms are
mainly governmental services-as opposed to transfer payments
(welfare), inter-area regulatory functions (pollution control), and

This content downloaded from 131.170.6.51 on Wed, 06 Jul 2016 12:13:41 UTC
All use subject to http://about.jstor.org/terms
136 Johannes Althusius

business type activities (the Post Office).

A distinction has already been made between three types of gov-
ernmental processes: (1) the allocation of resources; (2) policy-
making; and (3) administration. The "responsible decentralization"
approach of the New Federalism principally involves changes in the
second area.
Service programs (such as education, manpower, public health)
have traditionally been administered at the State-local level. But
what happened under the Great Society is that policy-making for
these functions has increasingly become centralized. This is an impor-
tant point. The Administration is not saying pull the Feds out of
their role in helping to finance these services-the allocation func-
tion. What it is saying is that the heavy influence of Washington
should be drawn back in selected functional areas from dictating to
States and localities on policy and, to a lesser extent, on the develop-
ment of administrative procedures and systems.
Manpower is an illustration. It is a service area in which there is a
high degree of variation among geographic areas in the character of
problems, in labor market conditions, and in job service needs. The
Administration's Comprehensive Manpower Act proposed to Con-
gress August 12, 1969 would consolidate authority for the major
manpower programs in the Department of Labor and provides for
flexible funding, sensitive to State and local needs. It would make
possible a decentralized system in which governors and mayors can
play a major role in planning, coordinating, and administering man-
power and related services.*
RE VENUE SHA RING

Revenue sharing is the fiscal keystone of the New Federalism.

Besides its financial effect, it would have a quite fundamental poli-
tical impact. At the same time that it modifies the Nation's total tax
system-placing greater reliance on the growth-elastic Federal income
tax-it would strengthen our federalism by making the grant-in-aid
system broader and less conditional. It would thus put states and
localities in a position to handle their own problems and needs on
their own terms.
Under the President's plan Federal funds would flow annually and

* Since Johannes Althusius first put pen to paper in June 1970, the Administration has
gone even further in its program for decentralizing policy control in the use of manpower
funds. President Nixon in his 1971 State of the Union Message recommended a "Special
Revenue Sharing" approach in this area, a broad functional area grant to States and
localities for manpower services. Althusius would refer the reader to a descriptive article
on the meaning of special revenue sharing by Richard P. Nathan, "Special Revenue
Sharing: Simple, Neat, and Correct," State Government Administration, July/August,
1971.

This content downloaded from 131.170.6.51 on Wed, 06 Jul 2016 12:13:41 UTC
All use subject to http://about.jstor.org/terms
 New Federalist No. 3 137

automatically both to State and local governments to be used for

purposes which they determine to be of the highest priority.
While revenue sharing would not affect the internal structure of
the existing grant system, it would quite basically alter its future. It
says, in effect, while we can expect continued growth in fiscal sup-
port from the Federal Government to States and localities (now $28
billion), in the future a higher proportion of this aid should be in the
form of general support grants to both States and localities.
CONCLUSIONS

The Nixon Administration came to power in a period of frustra-

tion with existing governmental institutions. Public bureaucracies
were under fire. There was widespread concern (often legitimate)
that programs for the poor miss their mark, that public institutions
lack direction and imagination, that urban decay is all too often
exacerbated-rather than relieved-by governmental efforts. Growing
out of these and other concerns, the Nixon Administration has set
out to reform social policy under the heading of the New Federalism.
Overall, the significance of the Administration's domestic policies
is not only that they chart new directions. They also involve a sub-
stantial commitment of resources. In their first five years of effect,
the Administration's welfare reform, Food Stamp, and revenue
sharing proposals are designed to channel an estimated $45 billion to
$50 billion into meeting the stubborn social problems of the poor
and alleviating the fiscal crunch on State and local government.*
Summarizing the two main principles of the New Federalism,
there is first the point that areas of exclusive or predominant Federal
responsibility should be more clearly identified and program reforms
adopted where needed to improve the performance of the Federal
Government in these areas (e.g. welfare).
Second, in areas of primarily State-local responsibility, Federal aid
policy should shift. More opportunity should be provided for recip-
ient jurisdictions to make their own choices. Efforts must be made to
define these functional areas more broadly.
These principles cannot be applied rigidly. Existing political rela-
tionships are not easily changed. The disruption of on-going activities
must be avoided. But, over a period of years, these principles can
help invigorate American governmental processes at a time when the
anonymity and frustrations of modern life require that we build a
stronger sense of community and make our public institutions more
adaptable to the needs and wishes of our citizenry.
* This projection is based on the FY 1971 budget. Since then, the President has quintupled
his general revenue sharing proposal and called for five "Special Revenue Sharing" bills
(manpower, education, law enforcement, urban development, rural development) with
new funds for each.

This content downloaded from 131.170.6.51 on Wed, 06 Jul 2016 12:13:41 UTC
All use subject to http://about.jstor.org/terms