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Over the last several months, the idea of transferring more power from Washington to states and local communities has been at the forefront of political debate.

An effort to organize a major gathering of state officials to discuss those ideas, however, has apparently fallen victim to some other political currents.

The "Conference of the States" was to be held later this year, with an organizational meeting slated for July. But the organizers--the National Governors' Association, the National Conference of State Legislatures, and the Council of State Governments--announced last month that the planning meeting would be postponed until the fall, and the conference itself has been put off indefinitely.

Abe Frank, a spokesman for the Council of State Governments, said conference organizers had hoped to secure support from 26 state legislatures before holding the planning meeting. As of last week, only 14 states had passed resolutions in support of the conference.

The conference idea was criticized both by conservatives, who feared it would evolve into an effort to alter the U.S. Constitution, and liberals, who feared the meeting would be dominated by Republicans.

The nonpartisan Congressional Research Service has cast doubt on the Clinton Administration's claims of budget savings under the direct-lending program, in which the government makes educational loans to students through their colleges, rather than guaranteeing loans made by private lenders.

In a memorandum last month to Rep. Bart Gordon, D-Tenn., an opponent of direct lending, two C.R.S. researchers conclude that "there may be a logical rationale for direct lending, but lower cost is not it."

Measuring the cost of administering both programs as a percentage of loan volume, the Education Department claims that the cost of direct loans is 3.89 percentage points lower than that for the older guaranteed-loan program.

The memo said that the Administration did not account for risks now borne by the private sector that will shift to the department under direct lending, and that it underestimated administrative costs.

The researchers also said Congress achieved significant savings in the guaranteed-loan program when it reduced some payments to private-sector participants in 1992.

--Mark Pitsch

Vol. 14, Issue 33

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