Although federal involvement in education has been reduced in the 1980's under the Reagan Administration's "New Federalism," it is far from clear that state and local governments are willing and able to adequately compensate for this decreasing involvement to ensure educational equity and quality. In the current debate over federalism, three types must be distinguished: "doctrinal federalism," which describes how levels of government ought to relate to each other; "functional federalism," which defines how such levels actually do relate to each other; and "strategic federalism," which emphasizes the ways one level of government manages to influence another. The history of the enactment of the "Education for All Handicapped Children Act" (1976) demonstrates the extent to which educational issues raised initially at local levels may assume national importance through court litigation. Recent research into the effectiveness of various intergovernmental grant proposals and the decision in the Minnesota case of "Mueller vs. Allen" in favor of tax deductions for parents sending their children to private schools suggest that responsibility for the future of education should be shifted away from the courts to become more a matter of public policy debate. (JBM)