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FEDERAL-STATE RELNTIONS
Remarks by Honorable Parrie Bryant, Chairman
Advisory Connussion on Intergovernmental Relations
Before the
Business Council
washington, D. C.
December 7, 1967
I am extremely glad to have an opportunity to discuss before
the distinguished members of the Business Council the subject of
Federal-State relations. New links are being forged between the
several levels of government in these united but diverse States,
and the process has staggering implications not only for the
participant governments but also for business. It is also true
that if the business commity understands what is happening it
can play an effective and beneficial role in guiding the changing
process.
It is axiomatic that societies evolve governmental structures;
they do not create them overnight. We marvel at the genius of our
founding fathers who designed a federal system of government, with-
out forgetting that the roots of the tree of democracy are set
deep in Hestern history.
The task was not solely the product of that long hot session
in Philadelphia in 1787. We look back with astonishment at the
accomplishment of those tumultous months in which the delegates
struggled to find agreement on the fundamentals of our free system.
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State constitutions contain prohibitions against any cammingling
of State efforts and private efforts. These are an unnecessary
hangover from an earlier day and should be modified.
If the past several months have proved anything, they prove
that the domestic problems with which this country is confronted
are of such importance, of such urgency, and of such magnitude as
to be beyond the capacity of the Federal Government, the State
government or local governments acting alone or in concert. They
require the unified dedication of efforts of the private, the
public and the philanthropic sectors of our great Nation.
Let me close then with a plea to you to intensify your
concern and interest with the problems of federalism. Our federal
system is one of the great heritages of America. It has served us
well for nearly two centuries. It has worked and worked effectively
in the past. It must be preserved and strengthened for the future.
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But those sessions were not the beginning; they were the end of a
long process of debate and evolution which began in the Middle East,
migrated to England, and was transported to our shores. Here it was
adapted to the New World and here it flowered into the thinking that
shaped the end-product that was, and is, the Constitution of the
United States.
This evoluntionary character of American federalism was aptly
stated by Woodrow Wilson when he said: "The question of the relation
of the states to the federal government is the cardinal question of
our constitutional systen....It cannot, indeed, be settled by the
opinion of any one generation, because it is a question of growth,
and every successive stage of our political and economic development
gives it a new aspect, makes it a new question."
The constantly changing nature of this relationship as noted
by Wilson can be illustrated by a few highlights over the past
century or so.
Prior to the Civil war, and exclusive of the fields of money,
credit, banking, and the postal service, State governments were the
repositories of most domestic government in the United States. The
States had a clear and free field for governing and for experimenting
in governing.
However, in a few short but fateful years following the Civil
War the people in nnny States became outraged at scandalous conduct
of public officials, both in State government and in the large cities.
This outraged citizenry proceeded to place in State constitutions
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drsstic limitations upon the power of the State to govern and addi-
tional limitations by the State upon the powers of municipalities.
Thus, our States became shackled, and they in turn seriously hand-
cuffed the capabilities of our local governments. More or less
concurrently we saw the National Government becoming increasingly
concerned with new aspects of domestic affairs as the impact of
the Industrial Revolution became felt.
We then entered a period in which Federal-State relations
were primarily a constitutional question. Many court decisions dealt
with the relative power of the States to experiment in various aspects
of social legislation; these decisions also dealt with the power of
the National Government to legislate in intereetate commerce and
other fields. Federal-State relations continued to be a constitutional
question until the thirties when new court decisions began to hold
that under the so-called welfare clause the National Government was
relatively free to appropriate funds for the enhancement of almost
any kind of domestic activity. Consequently, Federal-State relations
began to be less of a constitutional question and more of a political
and financial question.
Following World War 11 another factor in Federal-State relations
began to assert itself; I would call it the "responsiveness factor."
Faced with State governments beset by fiscal problems, guided by
constitutions that greatly restricted their flexibility and charac-
terized by legislatures which conceived an identity between the 35352;
g§g_and the public good, citizens began to find in the National Congress
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e more sympethetic response to their domestic governmentel needs.
Grent-in-sid progrems begen to be voted thet would serve the cities
directly rether then through the Stetes. Pnrentheticslly, let me
es, in ell csndor thet with regerd to this matter of responsiveness
the business community did not elweys pley e constructive role in
the Stste Houses. Quite often business organizstions opposed new
Pederel programs on the ground thst the problems to which they were
directed could be more properly ettecked st the Stete level. Then
when Ststes would consider legislstion desling with the problem
Stete chsmbers of commerce end others would tell the legislature
thst ss fer es they were concerned the best government wee the lesst
government end thet the problem hsd better be left to the "merket
place" to resolve.
Coming now to the present, we ere fecing still s new sspect
of Pederel-Stete reletions, one chsrecterised by the "mensgement
fector." He hsve been witnessing s tremendous growth of Federsl
grents-in-eid both in doller megnitude end in number of programs.
In 1920 the totsl of Federel grants to the Stetes amounted to
something in the neighborhood of $30 million. Even before 1932 such
grsnts hsd incressed st lesst four times. By 1939 nesrly $3 billion
in grsnts were mode ennuslly to the Stetes. In fiscel yesr 1967 an
estimated $14.7 billion for grents-in-sid to the Ststes will be spent
by the Pedersl Government. The President's budget for 1968 cells for
grents in excess of $17 billion.
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These staggering statistics do not, of course, tell the whole
story. They do show the gross character of the Federal-State
relationship. They do not show the changes in kind which are the
unintended-by-product of the change in degree.
At the present time more than 400 authorities exist for
grant programs. At least 160 have been added since 1960 alone.
More than 1,000 new Federal development districts, areas and regions
have been funded. A survey in a single county revealed that Federal
programs were administered by 125 separate Federal bureaus and
divisions. Obviously such statistics go beyond any philosophical
considerations.
It will readily be apparent to this audience that the adminis-
tration of 15 billion dollars, in the least complex, best ordered
situations, is a cost problem. Consider then the size of the task
faced by an administration that must administer this sum through
thousands of political bodies, and faced with a growth potential
to 60 billion dollars by 1972.
So we have a management problem of great dimensions. There
are too many grant-in-aid programs, and too many of them are going
directly to small local units of government all over the Nation.
According to the 1967 Census of Governments we still have 82,000
units of government in this country although, fortunately, the
number is declining somewhat, due largely to the consolidation of
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school districts. From a management point of view, it is unwise and
undesirable for Washington to try to deal directly with this multitude
of local governments. Consequently, we must place increasing
reliance upon the States as effective coordinators of local programs.
Yet the Constitution does not contemplate this character and
size of relationship between the Federal Administration and other
governments. There are links between the President and Congress,
between Governors and their legislatures,between the States and
Congress, but no constitutional link of this gross character between
the President and Governors. No Founding Father ever envisioned
such a link would be necessary. If you were to draw an organizational
chart of our governments you would find that there is no line of
authority running from the President to the Governors, but the
massive grant-in-aid programs have not waited for that line to be
drawn.
In my duties last year and until fairly recently as President
Johnson's "Ambassador to the States," I took a teen of Federal
officials to 40 different States to examine in detail the problems
of Federal-State relations that had emerged in trying to cope with
these many grant-in-aid programs.
In this work it was my objective to serve both the President
and the States; to soften the vertical cleavage between the levels
of government; and to help make the federal system of government work
more efficiently. Hundreds of problems were raised and hundreds were
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resolved; some were easy and some soluble only at the expense of
considerable blood, sweat and tears; others remain unresolved
because they represent deficiencies in the constitutional structure
of State governments and must await constitutional revision at the
State level.
The most significant achievement of that odessy, however,
is one I hope these remarks will share with you: we came to have,
and created among the Governors an awareness that the management
problems of the grant-in-aid programs were not the product of
Federal stupidity, nor arrogance, nor ill-will, but of a lack of
management machinery, which the President is now trying to create
before we are overwhelmed.
In terms of future action, in addition to a considerable
amount of consolidation and streamlining and reorganization of
Federal grants at the Washington level and more meaningful regional
arrangements for the Federal field establishment, the States
themselves have a big job to do, and much of this lies in the area
of constitutional revision. Our Governors need to become masters
of their own houses. They cannot achieve this goal if they have to
share executive power with a long list of independently elected
officials. States that have not done so:
... Need to provide for a strong executive budget;
... Need to provide reorganization authority to
the Governor;
... And need to provide a strong State planning
capability.
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On the legislative side we can no longer afford the
questionable luxury of widely spaced legislative sessions. The
legislatures:
.o. Need to staff their major conndttees on a
year-round basis;
... Need to meet as often as necessary to keep
the State government responsive to the needs
of its citizens.
most important of all, the States need to re-establish their
earlier positions as laboratories in our federal system. They
should not just react to Federal grants or other initiatives from
Washington. They should be breaking new ground and showing the
way to improved methods of dealing with our burgeoning domestic
problene, particularly in the great metropolitan areas.
Those of us in the business community can play a key role
in assuring the modernization of State government. We have a right
to expect it and we should demand action.
Let me caution you that the modernization of State and
local government means higher State and local taxes. We are not
just talking about streamlining these governments and making them
more efficient. Basically, we are talking about striking off the
shackles that were placed upon these governments before the turn
of the century and freeing them to deal in an effective financial
and policy way with urban affairs, manpower training, mass trans-
portation and the many other governmental functions that must be
carried on in our increasingly complex society.
Today,
... Only a handful of States contribute in a
meaningful financial way to the provision
or subsidization of low income housing.
... Only a few States provide funds for mass
transportation.
... Not many States are assisting in the relocation
of people and businesses displaced by govern-
mental public works programs.
Yet all of these functions are grant-aided by the Federal
Government, and it is essential if our States are to continue to
play a meaningful role in our federal system that they become
involved policywise, programwise, and moneywise in these respon-
sibilities of local government.
This leads me to a final but very important point.
The kind of changes of which I speak require both the
expertise and the aggressive support of the business community.
We cannot afford the luxury of waiting until crisis forces change--
the changes required should be rational pro-judgments, not panic-
driven post-judgments.
I would suggest to you and to the Governors and to the
State legislative leaders that in the processes of constitutional
revision you search out and identify any existing barriers to an
effective working partnership between State and local government
on the one hand and private enterprise on the other. Many of our
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