O]ur next major undertaking must be a program — just as bold, just as innovative — to make government again accountable to the people, to make our system of federalism work again.

 

Our citizens feel they’ve lost control of even the most basic decisions made about the essential services of government, such as schools, welfare, roads, and even garbage collection. And they’re right. A maze of interlocking jurisdictions and levels of government confronts average citizens in trying to solve even the simplest of problems. They don’t know where to turn for answers, who to hold accountable, who to praise, who to blame, who to vote for or against. The main reason for this is the overpowering growth of Federal grants-in-aid programs during the past few decades.

 

In 1960 the Federal Government had 132 categorical grant programs, costing $7 billion. When I took office, there were approximately 500, costing nearly a hundred billion dollars — 13 programs for energy, 36 for pollution control, 66 for social services, 90 for education. And here in the Congress, it takes at least 166 committees just to try to keep track of them.

 

You know and I know that neither the President nor the Congress can properly oversee this jungle of grants-in-aid; indeed, the growth of these grants has led to the distortion in the vital functions of government. As one Democratic Governor put it recently: The National Government should be worrying about “arms control, not potholes.”

 

The growth in these Federal programs has — in the words of one intergovernmental commission — made the Federal Government “more pervasive, more intrusive, more unmanageable, more ineffective and costly, and above all, more [un]accountable.” Let’s solve this problem with a single, bold stroke: the return of some $47 billion in Federal programs to State and local government, together with the means to finance them and a transition period of nearly 10 years to avoid unnecessary disruption.

 

I will shortly send this Congress a message describing this program. I want to emphasize, however, that its full details will have been worked out only after close consultation with congressional, State, and local officials.

 

Starting in fiscal 1984, the Federal Government will assume full responsibility for the cost of the rapidly growing Medicaid program to go along with its existing responsibility for Medicare. As part of a financially equal swap, the States will simultaneously take full responsibility for Aid to Families with Dependent Children and food stamps. This will make welfare less costly and more responsive to genuine need, because it’ll be designed and administered closer to the grassroots and the people it serves.

In 1984 the Federal Government will apply the full proceeds from certain excise taxes to a grassroots trust fund that will belong in fair shares to the 50 States. The total amount flowing into this fund will be $28 billion a year. Over the next 4 years the States can use this money in either of two ways. If they want to continue receiving Federal grants in such areas as transportation, education, and social services, they can use their trust fund money to pay for the grants. Or to the extent they choose to forgo the Federal grant programs, they can use their trust fund money on their own for those or other purposes. There will be a mandatory pass-through of part of these funds to local governments.

 

By 1988 the States will be in complete control of over 40 Federal grant programs. The trust fund will start to phase out, eventually to disappear, and the excise taxes will be turned over to the States. They can then preserve, lower, or raise taxes on their own and fund and manage these programs as they see fit…

 

Some will also say our States and local communities are not up to the challenge of a new and creative partnership. Well, that might have been true 20 years ago before reforms like reapportionment and the Voting Rights Act, the 10-year extension of which I strongly support. It’s no longer true today. This administration has faith in State and local governments and the constitutional balance envisioned by the Founding Fathers. We also believe in the integrity, decency, and sound, good sense of grassroots Americans…

Q1. In this State of the Union Address, President Reagan states, “Our citizens feel they’ve lost control of even the most basic decisions made about the essential services of government, such as schools, welfare, roads, and even garbage collection. And they’re right!”

According to Reagan why have citizens lost control over “essential services of the government?”

Q2. In this State of the Union Address, President Reagan quotes a Democratic Governor as saying, “The National Government should be worrying about [nuclear] ‘arms control, not potholes.’” What did the Democratic Governor mean? Why is Reagan using this quote in his Address?

Q3. Alexander Hamilton and Thomas Jefferson differed over the meaning of federalism. The difference in outlook endured at least until the Civil War, if not longer. Compare and contrast Hamilton’s position to Jefferson’s and then compare their view to President Reagan’s. To which position on Federalism is Reagan closer to? Why? What evidence can you bring to support your assertion?

Q4. Reagan argues that there are so many different federal programs it has made government “more unaccountable.” What does Reagan mean when he argues that government has become unaccountable? What are the consequences if government cannot be held accountable? How might we know if government has become unaccountable?

 

Q5. Reflect on the meaning of Federalism. Do you know who to contact if a pothole on your street needs to be filled? What are the consequences if citizens do not know who to blame for a problem that government is failing to solve? Do you think local elected officials escape criticism because most people assume that the Federal Government is responsible for all government action?

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