Reagan's ‘New Federalism’

Report Outline
Government's Changing Goals
History of Federal-State Ties
Reversal of Federal Function
Special Focus

Government's Changing Goals

Steps to Limit Washington's Influence

Ronald Reagan's first months in office could mark the beginning of a reversal in the role the federal government has played over the last half-century. The changes Reagan is seeking in the name of “new federalism” are part of his announced effort to cut taxes, trim spending and significantly reduce “Washington's influence” over the states. The impetus for this undertaking stems from the president's decisive victory in November, which the White House interprets as a popular mandate, and from his often-repeated commitment to balance the budget and reduce inflation.

Reagan's program rests on two ideas long associated with conservative politics: that of decreasing the size and influence of the federal government and making it more efficient. To help accomplish these aims, the president has pledged to return a number of federal responsibilities, particularly in the area of social and economic assistance, to the state capitals and from there to local governments. “It is my intention … to demand recognition of the distinction between the powers granted to the federal government and those reserved to the states or to the people,” Reagan said in his inaugural address. “All of us need to be reminded that the federal government did not create the states; the states created the federal government.” Reagan added: “It is not my intention to do away with government. It is rather to make it work — work with us, not over us; to stand by our side, not ride on our back.”

The great expansion of the federal government dates from the emergency relief projects started during the Depression. Over the years, the philosophy of federal responsibility that emerged during the New Deal fostered a proliferation of agencies and spending programs emanating from Washington. The Reagan administration now wants to reverse that trend. “What was once a federal helping hand has become a mailed fist,” Reagan recently told a group of mayors. The cause, he said, is the “increased intervention of federal authority.” Reagan's plan to reduce such intervention centers on a series of proposed spending cuts that reduce President Carter's budget for fiscal year 1982 by about $44 billion.