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power to regulate the transportation of nuclear wastes. The Administration may not believe in minimum national standards for education, nutrition, health care, the environment, and energy assistance; but it clearly does believe in maximum national standards to hamstring state and local restraints on concentrated private power. The Reagan new federalism is in reality old feudalism which takes from states and cities to make up for the federal deficit. It offers them the form of greater power, but reduces the actual power of those governments to protect their people from large and impersonal institutions. The Reagan Administration is not pro-federalism, but anti-government. This conference, like the Center on National Policy, can present truer and more constructive conceptions of federalism that do not rest on ideology, but on practicality. When Americans voted for Ronald Reagan, they were not seeking rightwing nostrums, but practical answers. And the one place where we will not find such answers is in a rigid philosophy that always calls for bigger government or smaller government. President Reagan and I agree that the federal system is not working as well as it should, and that we must strengthen it. But we disagree profoundly on the nature of the change. Where government is bad, his cure is no government; mine is better government. His program is the repeal of federal responsibility; mine is the sharing of responsibility with state and local government. To paraphrase Robert Frost, two roads diverge before us one leads to federal abdication, the other leads to the partnership of federalism. And the road we choose will make all the difference for our economy and our people. We must encourage states and localities to fulfill one of their historic functions as laboratories of government, seedbeds of public experimentation. The states have been the source of an impressive array of innovations, including public financing of elections, utility rate reform, freedom of information, and environmental protection. California has pioneered a moratorium on nuclear energy. And the movement for a nuclear weapons freeze began with local referendums and town meetings in Western Massachusetts and Vermont. At every time of ferment and change in our history, this kind of creative federalism has helped to move the nation. Indeed, many of the programs of the New Deal followed the example and the experience of the states. Franklin Roosevelt’s WPA of the 1930s paralleled Al Smith’s jobs program of the 1920s in New York. Where states and localities have the will to experiment, the Federal Government ought to get out of the way so long as basic questions of civil liberties, civil rights, and fundamental public safeguards are not at stake. For example, the Administration regularly complains about the soaring budget for entitlements, but it rejects the one proven step that can stop the relentless inflation , in Medicare and Medicaid which is hospital cost control. On their own, eight states, including Massachusetts, have enacted a system of control. They have been effective in keeping costs down without diminishing the quality of care. Health inflation is a national problem, but this is an area where the states have proven that they can do the job. They deserve the first crack at cost containment. And a federal program should apply only when and where the states fail to act. On this issue, they have already shown us the kind of new federalism that actually means something in dollars and cents terms. When Washington controls the resources or launches an initiative, it should remember that even the most national programs ultimately prosper or falter because of their impact on states, communities, neighborhoods, and families. For many years, I have favored the right of local communities to decide where to spend federal highway aid on roads, or mass transit. Similarly, I took the lead in designing a Mental Health Systems 20 SEPTEMBER 17, 1982 Act which provided for a cooperative partnership among the federal government, states, and localities. In my view, that Act exemplifies federalism far better than the Administration’s block grant which will mean more responsibilities and fewer resources for the states, and could mean the complete neglect of vital needs. Federalism also has a special role to play in this time of recession and in our national transition to a new economic era. Federal job-training programs are essential, but so is state and local participation if we are to train people for jobs that are actually there. The Kennedy-Quayle Job Training bill, which is co-sponsored by a Republican Senator, involves a joint endeavor of the labor department, governors, mayors, and business. The purpose is not make-work, but to make individuals ready for productive work in the private sector. I reject the notion that we must choose between extremes that the Federal Government must be pervasively dominant in its programs, or alternatively that federalism demands a flight from national commitment. I am committed to a federal Title I education program, which assures funds to teach basic skills to poor children, whose parents often have the least political clout at the state and local level. I also know that sometimes regulations become excessive. But we do not have to throw out the educational benefits with the bureaucratic bathwater. We can ease the administrative burden without ending critical federal support. We can give local school boards and all the schools receiving federal aid more time to fill out courses in their curriculum, instead of more forms to fill out and mail to Washington. We can do this without destroying national protections for those whose voices and rights were denied in the not so distant past. Federalism has a promising future, if we can free the idea from the misuses to which it has been put by the present Administration. We can open more paths to state and local initiative and to the cooperation of governments with each other and with the private sector. We can explore new arrangements to empower people and to give them a greater sense of control over their own lives, through grassroots communities and neighborhood groups. And we must remove as well another obstacle which afflicts federalism as much as it blights our other hopes the Reagan Administration’s disastrous economic policy. Whenever his critics complain about that policy, the President has challenged them with the question: “What is your alternative?” Somehow that question has become a measure of the present discussion: It is almost as if we would be better off endlessly continuing to do the wrong thing rather than stopping the policy, so that at the least we will not make things worse. In essence, the President is saying, the answer to failure must be more of the same. In fact, the President knows, his staff knows, and every political reporter knows that as the party out of power, the Democrats will not unanimously agree on a single alternative, detail by detail. That has never happened in American history. Indeed only two years ago this month, when the Republicans were out of power, the Reagan program was scorned as “voodoo economics” by the man who now serves as Vice-President. There will not be one unified Democratic alternative until 1984. And given the nature of Democrats, we will never be as monolithic as the Republicans in Congress were last year. But an array of alternatives can contribute to the shaping of a more sensible economic policy. Unfortunately that appears to be more and more unlikely. The Administration is now pursuing rhetorical rather than economic success. In the current budget controversy, White House aides, speaking as reliable sources, confide to reporters that their real purpose is not compromise, but the chance to shift the blame for deadlock and economic decline to the Democrats.