Could it be true? Without a funeral, “New Federalism” is dead? And the executioner is a Republican president?

It’s hard to believe, but William Fulton, in his California-based Planning and Development Report, suggests we’re seeing at least a flashback to the 1960s. There’s reason, he suggests, to see George Bush as a Lyndon Johnson-style, “Washington-Knows-Best” politico, dictating to state and local governments, ditching ideas of shared federal responsibilities and leaving critical decisions to local officials.

Here are some excerpts from Fulton’s analysis –

In the popular press, Bush’s proposals for both Section 8 housing vouchers and Community Development Block Grant (CDBG) funding have been characterized as classic Republican “cutting and gutting.” The president’s “Strengthening America’s Communities Initiative” is likely dead for this year, but he’s not likely to give up.

On Section 8, Bush is seeking to take a housing assistance program revamped by the Reagan administration on a voucher model and move it toward a block grant model. On the CDBG program, Bush is proposing to do away with a block grant program shaped by the Nixon administration and replace it with a new set of programs that are targeted at economic development efforts — and housed in the business-oriented Department of Commerce.

Throughout it all, one thing is clear: Bush is proposing a far more radical shift than either Ronald Reagan, who happily ignored most urban programs, or his father, who appointed the inspiring Jack Kemp as HUD secretary. The big criticism his appointees offer: today’s urban programs “currently lack clear goals or accountability measures.”

But that was the whole point when the Nixon administration created the CDBG program in 1974, mostly as a sop to the emerging suburban constituencies of the time. The Great Society effort of the 1960s had created a passel of categorical urban aid programs. It was Nixon, seeking to mollify a Democratic Congress even while nurturing suburban Republicans, who rolled these programs into block grants, giving local governments more spending flexibility. The CDBG has survived with bipartisan support ever since.

The Bush proposal would re-establish strong federal control over the goals and purposes of community and economic development programs by using the money to target specific development strategies in specific distressed communities. In this way, the Bush administration proposal represents an eerie mirror image of the Johnson administration’s original vision of urban aid.

Bush’s Section 8 reform proposals are even more indicative of how things have changed for Republicans during the last 20 years. The last major Section 8 revamp came when Reagan ditched Johnson-era housing programs aimed at housing production in favor of voucher programs that gave low-income renters the ability to obtain housing in the private marketplace.

But over the long term maintaining a market-oriented voucher program has proven more expensive than building affordable housing for the simple reason that there is no brake on rents in the open market. Congress has also expanded the Section 8 program in recent years.

The administration appears to be hoping to free up money to fund a home ownership program that would focus on families that are poor (60% of median income) but not extremely poor, as Section 8 does. Bush is proposing a Single-Family Ownership Tax Credit program, similar to the Low-Income Housing Tax Credit program.

Bush could be right. Maybe a more targeted community development program would be more effective than a block grant program at achieving certain goals; an ownership housing program might help stem the Section 8 program’s red ink. But we’re learning a lesson: one generation’s magic bullet - liberal or conservative - can become the next generation’s boondoggle or sacred cow.

You can see the complete text of Fulton’s article with this link.