n and more links between databases than has ever existed in the past.

New Federalism

However, at heart of the new federalism lies legislatively stated restrictions on what regulations can be written by HHS.

Mark Greenberg, of the Center for Law and Social Policy, called a little-known section in the new law -- Section 417 -- a "hornet's nest of new issues," which, while directly related to HHS, may ultimately have consequences for the whole federal establishment.

Section 417 states: "No officer or employee of the federal government may regulate the conduct of states under this part or enforce any provision of the part, except to the extent expressly provided in this part."

The sweeping wording of Section 417 suggests, according to Greenberg, that it could even apply to federal courts, restricting their power to intervene unless specifically allowed. This could dramatically change the process by which federal law is interpreted by creating a power outside the reach of the federal judiciary.

The trend of limiting the role of federal regulatory direction, along with new approaches to re-inventing government called for in the Government Performance and Review Act, is changing the way that federal agencies think about what their responsibilities are in terms of negotiative rule-making, performance monitoring and goals setting. "What federal agencies are being called upon to do is be more of a facilitator, persuader, provider of technical assistance -- almost a clearinghouse role -- rather than simply adopt a compliance monitoring role, and that is a major change," said Demetra Nightingale, director of the Welfare and Training Research Program at the Urban Institute.

"I think some people look at it as a constraint against what the federal agencies can accomplish," she added. "But I think as much, it is an opportunity if the agencies can begin thinking in a more progressive way about what their potential leveraging roles can be.

"The agencies I deal with -- the Labor Dept. and HHS -- while they may not be fully aware of the shift, are definitely operating in a different way in terms of being able to provide useful information, integrating this toward continuous improvement, and allowing as much state and local flexibility as possible. So the shift is happening. But whether the federal agencies could articulate that it is happening, I think, is less likely."

Filling The Vacuum

Not all states, said Nightingale, have moved as quickly as they might in jumping into the new role that has been thrust upon them. "What we are hearing from the field on welfare reform, on some of the workforce issues, and now with the welfare-to-work $3 billion money, is that many states still want the same kind of direction as before. Some of the mentality persists of 'just tell us what the regulations are, tell us what we have to do, and we'll do it.'

"Certainly there are some states that are moving forward and have been moving forward, and are more progressive. But the majority of states, I think, are still in the traditional mode of waiting for the feds to tell them what to do. So there may be a little bit of frustration when the federal regulations are not as directive as state and local people have gotten used to.

"And then, similarly, there may be frustration among those who are more in the know and think that the regulations are still too restrictive. So I think we are still going through an adjustment process where some people are thinking the feds are being too directive when they should not be directive at all anymore, and there are others who are sitting back and saying, 'where's our direction?'"

One of the things happening at the national level, said Nightingale, although no one really articulates it, is a clear attempt to remove some of the barriers to coordination -- whether it is through more waivers, like through the Labor Dept. now, or through the food stamp program.

"There are a lot of ways that states and localities might be able to get either special discretionary money or request waivers from restrictive federal regulation," Nightingale said. "To me, it seems that what they should be doing is figuring out what is best for their particular community or state environment and then try to think about the different resources for doing that rather than waiting for the federal legislation to be passed in a particular area or for federal regulations to come out. Rather, they should formulate a strategy, stick to it and then try to fit it in.

"That is very different, and it is hard. For example, for state legislators who are used to saying, 'Just give us the bottom line. What is the minimum that we have to do, and when do we have to do it by?' Really, this is about a whole shift in governance at the state and local level."

The essential point is not simply that policy making functions, which were once centralized in Washington, now have gone back to the states. Rather, a key ingredient of the shift involves the ways and means through which federal agencies can continue to exercise authority, albeit through influence rather that direct regulation.

"The conventional wisdom is that welfare reform got devolved to the states and that Washington is basically out of it," points out Primus.

"I would argue that this new welfare law, in some ways, has given HHS a much more enhanced role. The policy decisions are clearly being made at the governors' level. But there are 12 specifically authorized penalties, whereas there used to be really only one penalty before welfare reform. And the secretary of HHS also now has the ability to give out performance awards, and she gets a lot more data. So all these things represent quite an enhanced role. The big question is how these things are used. The secretary may use them quite passively; but if she uses them aggressively, she will we able to continue to shape policy quite significantly."

Role of Technology

Thomas L. Gais, director of the Federalism Research Group at the Nelson A. Rockefeller Institute of Government, concurs that HHS still can have enormous impact on what kind of program TANF (Temporary Assistance for Needy Families) turns out to be. "Developing the needed information system seems to be one of their biggest challenges in implementing the legislation," Gais said. "If on one hand, there is a strong emphasis on getting standardized comparable data on many aspects of the program, so that there can be good comparative evaluation and competition among the states for performance, that would seem to run in the face of some of the ideas the states have in developing their own notions of performance and how to measure it."

Gais suggests that HHS might do best if it continues on its current course, interpreting the reporting requirements from states as narrowly as possible within their perceived mandate, but also allowing as much variation beyond that as states want.

"Still, that doesn't really solve a lot of the states' problems because many states are still having difficulty getting the resources and the capacity needed to set up information systems that even do minimally what the TANF reporting requirements request," he added.

The Rockefeller Institute currently has field workers collecting data on the management aspects of welfare reform in 21 states. Gais said that the need for HHS to act both as a facilitator and to provide technical IT assistance is becoming increasingly apparent.

"I see very little actual technical assistance coming down to the states as yet," he said. "The big issue is how you create systems that comply with the TANF reporting requirements while, at the same time, still meeting

Blake Harris  |  Editor