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SOME MONTHS AGO, I attended a meeting in Washington, D.C., that included governors, members of Congress, federal agency leaders and others. We had an excellent discussion on federalism and the need to establish a better balance between states and the national government. The group appeared to agree that the federal government had grown too large, centralized and prescriptive, and that states needed more flexibility.

Then the discussion turned to other matters, including a minor federal program that some states had declined to implement. A liberal congressman spoke up. "Well," he said, "we'll just cut off their funding if they don't participate. This is an important program."A few weeks later, I was visiting with a conservative U.S. senator regarding crime legislation. I expressed concern about mandated sentencing guidelines being discussed in Washington. "Truth is," he said, "states just aren't being tough enough on crime. They're not getting the job done. We've got to make them do it."

That nationalist philosophy knows no ideological boundaries. Oppression from the federal level by conservatives isn't any better than oppression by liberals (well, maybe a little). The reality is that too many Washington operatives, whether conservative or liberal, hold a nationalist outlook, viewing states merely as administrative units that exist to carry out their programs rather than as co-equal partners in the federal system. But while they have acted like it for too long, states are not merely the delivery mechanism for federal programs. States created the national government. States have constitutional standing. The founders of this country expected states to stand up for their rights and to compete with the national government for power.

In fact, James Madison, father of the Constitution, described how states would oppose any intrusion of federal power. In The Federalist No. 46, he wrote that "ambitious encroachments of the federal government on the authority of the State governments would not excite the opposition of a single State, or a few States only. They would be signals of general alarm. Every (state) government would espouse the common cause. A correspondence would be opened. Plans of resistance would be concerted. One spirit would animate and conduct the whole. The same combinations, in short, would result from an apprehension of the federal, as was produced by the dread of a foreign, yoke."

Such concerted action by the states is now under way. A historic "Conference of the States" is being planned by state leaders, with help from national organizations such as the Council of State Governments, the National Governors' Association and the National Conference of State Legislatures. The goal will be permanent, fundamental reform and restructuring of the federal-state relationship.

Our state governments represent good governance because power is dispersed among 50 separate entities, thus allowing maximum experimentation, innovation and creation of programs that are responsive to local conditions and values. But while dispersed power has great virtue, it makes competing with a monolithic, concentrated force like the federal government difficult. In order to challenge and compete for their rightful role, states require a rallying event, a means of consolidating their power and taking collective action.

That is the purpose of the Conference of the States. Resolutions are now being introduced in all 50 state legislatures that call for the Conference of the States and appoint a delegation to attend. These delegations will gather later this year to develop an action plan to create permanent structural balance in the federal system, restoring states to their historic, rightful role as co-equal partners in the federal system. The plan approved by the Conference of the States will be taken back to state legislatures for approval, and then will be presented to Congress as the will of the states.

Successful organizations everywhere, both business and government, are decentralizing and downsizing. Bureaucracies are being dismantled across the world. The Industrial Age of centralized authority and top-down management is over. We are entering a new era, the Information Age, in which small, flexible, autonomous units will out-compete and out-perform their bureaucratic counterparts. If this country is to compete in the emerging global marketplace, its government needs to be structured like small but flexible and powerful PCs networked together, rather than a monolithic, rigid federal government mainframe.

The Conference of the States offers an historic opportunity to do what James Madison envisioned: States rising up in "general alarm," espousing a common cause and developing a plan of concerted action.