The Process of Program Phaseout: An Examination of the Dismantling of the US Public Service Employment Program

This article examines the dynamics of the dismantling of a large US federal grant-in-aid program, the Public Service Employment Program (PSEP), to determine whether the same factors that affect program expansion affect program contraction, and in a similar manner. Specifically, an examination is made of: (1) the impact local fiscal and political pressures have on the reactions of three groups of local policymakers (elected officials; PSEP administrators; administrators of agencies employing PSEP workers); and (2) the relationship between these policymakers' reactions and changes in PSEP objectives. The units of analysis are forty-two local governments located across the USA (a representative sample). The time frame of the analysis is December 1979–December 1980—a period of rapid phaseout in the PSEP. The results show that the same factors which dictate the actions of different sets of policymakers during program expansion also determine their relative levels of involvement in the phaseout period and their policy preferences (PSEP objectives) during retrenchment. The findings also suggest that local governments with long histories of federal program participation have developed fairly sophisticated reactive strategies, since phaseouts are expected events in the lives of most federal programs. These reactive strategies vary according to the economic and political conditions existing at the time of the mandated phaseout.