Both Parties Take Similar Paths as Nation Travels Road to Innovation

It’s never been considered as newsworthy as thong underwear or the fluctuations in Monica S. Lewinsky’s sense of self-worth. But history is likely to see what the scandal slaves in the press have missed: that the late 1990s are a period of dynamic policy innovation in cities and states.

Ideas such as community policing, charter schools, smaller class sizes in the early grades, an end to social promotion, insurance for children without health care, the conversion of welfare to a work program: All of these are advancing from coast to coast.

And just as in the Progressive Era a century ago, this modern reform agenda is gaining ground in both parties simultaneously. The State of the State addresses of Republican governors such as George W. Bush in Texas largely echo the speeches of California’s Gray Davis and other Democratic governors--and both of them sound much like President Clinton.

Where this consensus breaks down is on the proper role of the federal government in encouraging this wave of innovation. Increasingly, the national domestic policy debate between the two parties is revolving around that question--with the dispute likely to come to its sharpest point this year in the legislative battle over education.

On most domestic issues, Republicans posit an inverse relationship between national and local activism. They argue that the best way to encourage local innovation is to roll back federal rules and to give the states more control over the federal money they receive. That was the logic behind the GOP’s successful push in 1996 to convert the federal welfare program into block grants that gave states enormous freedom in allocating the money. Now the GOP wants to do the same on education.

Last year, Republicans advanced legislation (which Clinton blocked) to convert 31 federal education programs into $2.75 billion in block grants that states could spend as they chose. This year, GOP senators are poised to bundle even more education programs into an even larger block grant program.

“The true divide is over where does the most intelligent, efficient manager reside,” said Sen. Paul Coverdell (R-Ga.), a principal architect of the GOP’s education agenda. “The president and his colleagues feel that . . . it is here in Washington that you should decide what the priorities should be. We have concluded . . . that it is governors and . . . boards of education that should be making these calls.”

Clinton supporters reject that description of their aim. And indeed they have developed a more nuanced approach to encouraging local innovation that might be called flywheel federalism because it uses the vast mass of the federal government to accelerate promising trends already visible in the states.

Throughout his presidency, Clinton has pursued a consistent strategy of identifying policy innovations that have sprouted in a few communities and then providing financial incentives for other states and cities to replicate them. In a speech last month, Clinton opened a window to his thinking when he said: “Our laboratories of democracy [in the states] are great at inventing new ideas and testing them out . . . [but] we’re not so good at spreading the best of these ideas around in a comprehensive and timely fashion.”

In several areas, Clinton’s flywheel federalism has clearly quickened the spread of good ideas. In the early 1990s, a few police departments had experimented with community policing. Now more than 11,000 policing agencies have committed to pursue the reform through Clinton’s program to hire 100,000 new officers. Likewise, after a handful of pathfinder states instituted programs to cover uninsured children, Clinton won approval of a grant program to encourage the rest to follow. Now all but two states have implemented plans to provide health care to the children of the working poor. Similar results are evident on charter schools.

This same approach is apparent in Clinton’s current proposal to help states reduce class sizes by hiring 100,000 new teachers. But his principal education initiative this year moves in a new direction. Rather than offering carrots, he is brandishing sticks by proposing that states be docked some of their federal education money unless they undertake a series of “accountability” reforms, including ending social promotion, toughening teacher testing and establishing policies to intervene in failing schools.

Though they generally support these ideas, Republicans have reacted with outrage at the idea of Washington mandating them. Yet, coupled with their support for block grants, that has left the GOP in the position of arguing that Washington should give states money without setting any objective standards for performance--an odd place for fiscal conservatives to be.

Among House Republicans, the alternative that is emerging is to provide states financial incentives to undertake these reforms without mandating them. Clinton supporters say that will not drive change fast enough. But if the GOP coalesces around this plan, it could leave the White House in the odd position of arguing against incentives after they have relied on carrots to advance virtually all of their other goals, such as expanding community policing.

If both sides are interested, there is a reasonable compromise: using both penalties and bonuses to encourage local governments to institute these accountability reforms. That is the model Republicans applied in welfare reform. It could also be used to leverage local reform in areas like transportation (where states could be required to demonstrate progress in reducing gridlock or else lose some federal highway funds) and public housing (where Washington could tie funding to safety and upkeep).

As the partisan arguments escalate in the months ahead, it will be worth remembering the unspoken areas of common ground. Both parties are now largely pursuing the same educational ends, from ending social promotion to stiffening standards for students and teachers. And both increasingly agree that local governments should take the lead on reform, not only in education but also on the broad array of domestic concerns. What is left is a dispute over whether Washington can help mostly by getting out of the way--or by devising national means to disseminate the most innovative local ideas.