President Barack Obama’s State of the Union address illustrated
what a dead letter federalism is among Democrats. Not that further illustration
was necessary.
Federalism holds that the national government should limit
itself to things of truly national scope. Things that are primarily of local
concern should be left to state and local governments.
We are a long way from that. Today, the Democratic Party sees
virtually nothing as outside the purview of the federal government. The
Republican Party talks a good game about federalism, but usually ends up
undermining the principle when it acquires national power.
Today, the lines between the federal government and state and
local governments are hopelessly blurred. The federal government spends over
$600 billion a year on grants to state and local governments. Arizona state
government receives more in federal funds than it raises in general-fund
taxes.
Today, state governments operate principally as service
delivery mechanisms for federal social-welfare programs. This means that there
is no real political accountability for the programs, which is why they grow and
function like a blob.
If Medicaid costs are spinning out of control, who’s to blame
and who should do something about it? The federal government that provides most
of the funding and sets up the basic rules, or the state governments that
actually administer the program? The food stamp program has grown astronomically
of late. Purely a function of a bad economy, or is there something else going
on? Whose job is it to figure that out?
President Ronald Reagan wanted to sort out the blob with his
new federalism initiative, clearly making some functions, such as Medicaid,
fully federal, while making other functions, including most welfare programs,
fully state and local. There were some Democratic governors at the time,
including Arizona’s Bruce Babbitt, who were also interested in a sorting out of
responsibilities.
But agreement was never reached, nothing of significance
happened. So, the blob endured and grew.
Obama proposes to feed it even more. The federal government
should establish manufacturing innovation institutes in economically distressed
areas and provide incentive grants to states to increase the energy efficiency
of homes and businesses.
The federal government should fix 70,000 bridges and create a
federal fund to modernize ports and pipelines. The federal government should
have a new grant program to get high-school graduates better ready for high-tech
jobs. And, according to Obama, the federal government should make sure that
every kid has access to high-quality preschool.
The federal government, however, does not have a greater
interest in the recovery of economically distressed areas than the states in
which they are located, or greater insight into how to turn them around. Every
bridge in America is located in a state and local community that has a greater
interest in its condition than the federal government.
Every port and pipeline in the United States is located in a
state and local community. If there are gains to be had from modernizing them,
local governments have a greater incentive to get it done and done right than
the federal government.
Every kid in America lives in a state and local community that
is more interested in his education and workplace preparedness than the federal
government. What do we really have to show for the increased federal involvement
in education, under George W. Bush or Obama?
The federal government is broke, and broke in a way that
threatens the American economy. Proposals that it do even more are surreal, even
if they are supposedly paid for. If there’s loose change to be had, the federal
government should use it to reduce the deficit, not further expand its
reach.
It’s nowhere on the horizon,
but a revival of Reagan’s new federalism discussion is badly needed.
1 comment:
Yeah - it all started with that damn interstate highway system under Eisenhower (who balanced his budget). We should instead take Reagan's approach (who started the era of massive deficits through supply side tax cuts).
18th century style federalism is hard to maintain in the 21st century. We are one nation, not 50. Practically speaking, the interstate commerce clause applies to almost everything. Each state can't have it's own Social Security or old age healthcare system. It would not be efficient and a "race to the bottom" would reward states that ignored the poor and old while punishing those that chose to help those in need.
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