The State of American Federalism 1988-1989

Abstract

President Ronald Reagan must have smiled as he left office in January 1989. Although seven years earlier his formal proposals to design a New Federalism met with only a modicum of success, if not outright failure,' the legacy of his federalism philosophy-defined principally as reducing federal domestic expenditures, easing federal restrictions on federal-aid funds, reducing federal regulation of state and local governments, minimizing direct federal-local relations, and devolving or sorting out program authority2-may be felt well into the next century. Indeed, given the budget deficits of the past decade coupled with the automatic triggers in the GrammRudman-Hollings law, and the evolving realignment in federal-state-local relations, the Reagan federalism agenda may have accomplished more than many pundits realize.3 The "failure" of the New Federalism initiative in 1982,