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As the twig is bent.

President Clinton's experience as a state governor may make his administration more receptive to the concerns of state legislatures. Watch health and welfare reform for clues.

It was, by almost any measure, an impressive occasion. In mid-March, less than two months into the new administration, 100 state legislative leaders journeyed to Washington, D.C., to meet with President Bill Clinton. Speaking beneath a portrait of Abraham Lincoln in the White House state dining room, the president stressed his dual objectives of public investment and deficit reduction. He won applause for his support of several state initiatives, including mandate relief.

Maine Speaker John Martin captured the feeling: "We were in the East Wing. He knew us, called us by name. We felt welcome."

Ohio Senate President Stan Aronoff focused on the president's message: "We had been -- screaming about unfunded mandates for years. The president was saying he-understood; he was with us; he'd do something to help us."

In August, President Clinton spoke briefly to the NCSL Annual Meeting in San Diego. Beamed via satellite to three gigantic projection screens, the president also answered questions posed by a panel of six state legislators. The president broke during intense negotiations over the budget reconciliation bill to address the NCSL delegates. His message was an encouraging one for state officials: opposition to unfunded mandates, support for block grants, understanding of the issue of dedicating new gas tax revenues to the highway trust fund.

As Arizona Representative Art Hamilton points out, state officials were probably justified in expecting this new president to be sympathetic to their concerns. "State legislators, of course, are congenitally suspicious of governors. Yet, Bill Clinton had been with us in the state government trenches for years. It simply was natural to believe he would not forget just because he changed residences." The president himself reinforced this belief in his March meeting with legislative leaders. "I'd be hypocritical," he said, "if I changed my position just because I am no longer governor."

What does the record show so far? Has this former state official infused Washington with a fresh empathy for the problems of governing at the state level? Are there clues in the way the new administration approached its first major policy challenges as to how states may fare on issues, such as health care reform?

The answers, like most involving the federal government, are not especially straightforward. They lie partly in concrete policy outcomes, partly in administration initiatives awaiting final disposition, and partly in the structure and processes the president has established for dealing with state officials.

Clinton received considerable criticism for some early legislative defeats, most notably his economic stimulus package. By the August congressional recess, however, the administration was pointing with pride to several domestic policy accomplishments, including motor voter registration, family leave and budget reconciliation. Each of these, plus a less visible issue involving refugee resettlement, provides a mixed picture of the administration's responsiveness to state concerns.

The motor voter bill (actually the "National Voter Registration Act") had been fiercely debated in the previous two Congresses and was part of the partisan jockeying that occurred in preparation for the 1992 presidential election campaign. President George Bush had vetoed a similar version in 1992. Democratic congressional leaders and President Clinton favored it as a way of increasing voter participation and making the electoral process more accessible. Most Republicans in Congress opposed it for its increased potential for fraud. Having embraced motor voter during the campaign, Clinton made HR 2 an early session priority. The House adopted it in February, and the Senate, after snuffing out a filibuster, sent it along to the president in May.

The legislation contains significant new mandates for state governments and inserts the federal government into an area of public policy-election administration-traditionally reserved for the states. The Congressional Budget Office, for example, estimated that for the 25 states without a motor voter program, the costs would be about $20 million annually Estimates from some sample states, including California and Missouri, place the unfunded costs higher than that. Perhaps this is a case in which the president's party loyalty and campaign commitments have overshadowed his concern for mandates and state flexibility.

The Family and Medical Leave Act, which Clinton signed in early February, has a history similar to motor voter. Although federal family and medical leave legislation garnered significant Republican support, Congress failed to override two vetoes by President Bush. It, too, was an issue in the 1992 campaign and was an early legislative priority for Clinton. It, too, contains mandates. In particular, it requires state governments to allow their employees to take up to 12 weeks of unpaid leave for the birth or adoption of a child or to care for a seriously ill family member.

Some of the debate regarding the legislation illustrates a classic tension over the appropriateness of federal intervention in state activity. Half the states, proponents argued, already have family leave legislation. Why not make the practice consistent nationwide, thereby, among other things, removing it as currency in the competition among states for businesses and jobs?

The massive budget reconciliation bill that Congress adopted in August contains tax increases and spending cuts intended to reduce the federal deficit. It also includes new and expanded programs consistent with Clinton's often-stated belief in the need for long-term public investment. Several of its revenue and spending reduction components will have adverse effects on state budgets. They include the 4.3 cent gas tax increase, (the raise is not dedicated to the highway trust fund), elimination of enhanced matching rates for administering the food stamp and Aid to Families with Dependent Children programs, a new fee for federal administration of state supplemental social security benefits and limits on Medicaid payments to disproportionate share hospitals.

All of these, except the gas tax increase, were included in the president's initial budget proposal. The spending cuts alone will cost states approximately $4 billion over five years. Is this cost shift unduly harsh? "What you have to consider," says Ohio Senator Richard Finan, "is how much is too much. State legislators recognize-indeed, NCSL official policy recognizes--that states should share proportionately in deficit reduction."

In writing President Clinton about the reconciliation measure, NCSL President Art Hamilton stated the case this way: "We believe real deficit reduction is critical and warrants sacrifice."

Another way of deciding if the cost shift is too harsh is to consider what might have been. Two deficit reduction proposals that received serious attention had the potential for considerably greater cost shifts. The administration's Btu tax proposal would have included state and local governments. This, according to the Congressional Joint Committee on Taxation, would have cost state and local governments at least $10 billion over five years. Texas Democratic Congressman Charles Stenholm advocated an entitlement cap proposal that was the target of intense negotiations among House members, leadership and Clinton officials. New York Senator James Lack, who co-chaired an entitlements task force of state legislators and local officials, notes, "Our concern was not with caps per se. Rather, we worried that entitlement costs simply would be passed on to the states."

A much less visible case involving refugee settlement policy illustrates the new administration's uncertain start, but its willingness to respond to state officials. In january, the Department of Health and Human Services proposed a regulation that would have removed state governments from the refugee settlement process and turned it over to private and not-for-profit interests. Concerned that states would be ultimately accountable, state legislators and governors launched a blitz of letters and phone calls to HHS Secretary Donna Shalala protesting the rule. Surprised and clearly affected by the outburst, the administration withdrew the rule.

The image that emerges from the limited evidence so far is that the administration is at least partially responsive to state interests; yet these interests, which the president represented for many years in his position as governor of Arkansas, are frequently submerged or tempered by other influences or constraints--deficit reduction, for example, or commitment to a Democratic Party policy objective.

A key, as yet untested, measure of Clinton's commitment to state interests will be his support for reforms that have become the rallying cry of legislators throughout the country-changes that would provide relief from unfunded federal mandates and offer greater flexibility in administering shared programs.

State legislators have strenuously opposed unfunded federal mandates for several years. In his meeting with legislative leaders in March, President Clinton stressed his own opposition to them. He reiterated his position during his teleconferenced appearance at the NCSL Annual Meeting in San Diego.

Most of the work on unfunded mandates within the Clinton administration has been done so far by the National Performance Review Commission. Chaired by Vice President Al Gore, the commission has its own sweeping mandate to "reinvent government." Released in September, the commission's report makes two specific recommendations regarding unfunded mandates. The first would allow cabinet secretaries and agency heads to authorize selective relief from mandates. The other advocates an executive order that would limit the use of unfunded mandates in legislative proposals and regulations and establish a collaborative effort among federal, state and local officials to develop solutions to the problems. The report takes no position on the several congressional initiatives being considered to limit mandates.

The commission's report looks favorably on the need to provide state governments greater flexibility in administering shared programs. It recommends that the president submit a proposal, originally crafted by NCSL and the National Governors' Association, that would consolidate 55 existing programs into "flexibility grants" in six broad areas: education reform, work force quality, air and land environmental management, water quality, defense conversion and housing. This proposal, like many recommended by the Gore commission, requires review and approval by Congress.

A final, more elusive test of the administration's responsiveness to state officials rests with the atmosphere and structure it has established for handling intergovernmental relations. Each recent administration has established somewhat different ways for dealing with state and local issues and officials. Each has given intergovernmental relations some prominence within the White House staff, frequently using former elected officials as liaisons to the state and local government community.

The Clinton administration initially attempted an approach that emphasized issues over levels of government. The new staff, with limited state and local government experience, were divided among several of the president's major policy initiatives. After two months, these same people took on additional intergovernmental affairs responsibilities. For example, John Hart, deputy assistant to the president, who is deeply involved in the White House's health care reform discussions, became the liaison for state legislatures. Staff changes also caused some confusion. Regina Montoya, director of intergovernmental affairs, resigned in August and has been replaced by Marcia Hale, President Clinton's director of scheduling.

Despite this apparent turmoil, NCSL President Hamilton is satisfied with the access legislators have had to the White House. "The White House staff have been very gracious and accessible, not just for courtesy calls, but for substantive policy discussions." Arizona Senate Minority Leader Cindy Resnick recalls meetings in the spring on health care reform. "We had two groups there within a couple of weeks. The discussions were detailed, wide-ranging and frank. If we thought something was stupid, we felt comfortable in saying so."

Some legislators are less sanguine. Some are frustrated by the different treatment afforded governors. Ohio Representative Jane Campbell has been involved in a White House-sanctioned working group on welfare reform. "I think," she says, "they are beginning to understand our message. Legislators bring a different perspective, and legislatures are absolutely essential to the success of any state-federal program."

The record so far is not conclusive. The major test of the president's commitment to a constructive state-federal partnership will come in the administration's next two big challenges--health care and welfare reform. While many legislators and governors are advocating systems in both cases that will encourage state experimentation, other strong forces are demanding national approaches and uniformity. Their ultimate shape may depend largely on the president's roots--his time as governor, his work "in the trenches of state government."
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Title Annotation:President Bill Clinton has a state governor's experience
Author:Tubbesing, Carl
Publication:State Legislatures
Date:Oct 1, 1993
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