The $100 million federal empowerment-zone grant awarded to Baltimore will bring vast economic, social and psychological benefits. But it marks the end, not the beginning, of a period of large-scale aid from Washington. In fact, impoverished cities like Baltimore will be devastated by the Gingrich devolution.
Proposals to devolve federal responsibility for welfare and social services to the states do not sound alarms, as do orphanages for the poor and tax breaks for the rich, but they pose a greater danger to urban American than any other goal of the new Republican majority. House Republicans are considering ceilings on federal funds for welfare and food stamps or a swap, first proposed by Ronald Reagan, in which the states would assume the costs of welfare and food stamps, with the feds assuming Medicaid. Republicans also favor consolidating aid programs in education, housing, health and social services and turning over the funds to states in flexible block grants.
Democrats are climbing on the bandwagon. The Democratic Leadership Council's rejoinder to the GOP "Contract with America" calls for "Radical devolution . . . to shift responsibilities and resources away from Washington." President Clinton, a former governor, is on board. The bipartisan National Governor's Association has long advocated a reallocation of power between the federal government and the states.
Devolution obviously commands powerful support, and why not? State and local governments are closer to the people, therefore more likely to be responsive and efficient. Water the grass roots and watch innovation grow. What could be worse than the
out-of-touch Washington establishment and alphabet-soup proliferation of bureaucratic federal programs?
It's a persuasive argument that taps into our Jeffersonian roots. But it's one thing to eliminate red tape and strengthen local flexibility over federal dollars. It's another to use block grants and welfare reform as a smoke screen for wholesale abandonment of the primary federal role in funding programs for the poor -- which is what the Newtonians have in mind.
There are compelling reasons social welfare has evolved as the most fundamental federal domestic responsibility. First, states have unequal fiscal capacity. The top 10 states in wealth, such as Maryland, have per-capita incomes that are nearly 70 percent greater than the bottom 10. Maryland might be able to carry the burden, but what about rock-bottom Mississippi?
Second, and more important, is this century's war between the states: Fierce economic competition to recruit and retain businesses forces states to keep taxes low. Mercedes-Benz chose Alabama over Maryland and other states after extracting $250 million in incentives. Sun Roc Industries is moving 350 jobs from Cecil County to Delaware for a sweetheart deal worth $3 million.
Maryland's secretary of economic and employment $ development, Mark Wasserman, says this competition is "more acute than ever . . . an art form of extortion." The effect is to limit revenues available for social programs, even before governors such as Christine Whitman in New Jersey began deep tax cuts. The further effect is to shift the burden down to cities already unable to keep their heads above water.
National funding of social welfare recognizes these political facts of life. That's why the devolution movement of the '90s, like "new federalism" of the '80s, is not an idea whose time has come. Rather it is an idea whose time came, and went, 50 years ago when President Franklin D. Roosevelt, forced by the default of the states, instituted the dominant federal role in alleviating poverty.
Times have changed. The pattern of federalism has become a crazy quilt, and states have progressed as incubators for social-program reforms. But within the states, there has been virtually no step-up from pilot projects to large-scale implementation and success in combating urban poverty. Recent governors who achieved acclaim were mostly Southerners who moved their state's level of effort from sub-basement to ground-floor, at best.
Education funding illustrates the unwillingness or inability of states to assume responsibility for the poor. Lawsuits have been filed against at least 40 states for failure to fulfill what are usually state constitutional mandates to assure equity in school finance. Baltimore's recent suit against Maryland is but the latest example. Even though Maryland's aid to education has doubled over the past decade, disparities between the city and affluent counties remain appallingly wide. The same pattern holds nationally.
Final proof of the devolution pudding lies in the taste of conservatives for it. Their ill-disguised aim is to reduce spending for social programs at all levels, federal, state and local. Block grants disguise deep cuts. The Reagan era resulted in federal aid to Baltimore being slashed from $221 million in 1980 to $162 million in 1990 (without adjustment for inflation). Governors can be suckers for Faustian bargains in which they gain short-term flexibility in return for longer-term federal abdication of responsibility.
Governor-elect Glendening shouldn't fall for it. Let's hope that he realizes Congress can streamline and strengthen federal-state relations without sacrificing the urban poor.
Kalman R. Hettleman is executive director of Raise, Inc., an educational-opportunity program.