Is massive federal spending destroying the concept of federalism?
By Frank Pignanelli & LaVarr Webb
In national crises such as the COVID-19 pandemic, the federal government rightly steps up and provides directives and massive financial support to state and local governments and directly to businesses and individuals. But this immense federal intervention comes at the risk of making states even more subservient to the federal government, both financially and with more federal regulation and mandates. This raises important questions.
When the pandemic crisis is over, and after the expenditure of trillions of federal dollars, some of it given to states and local governments, will the federal/state relationship have been forever altered?
Pignanelli: “Ambitious encroachments of the federal government on the authority of the State governments, would ... be signals of general alarm. ... But what degree of madness could ever drive the federal government to such an extremity.” — James Madison
We who overindulge high-calorie foods would never risk credibility to blame the restaurants for our lack of discipline (I have no willpower with Italian cuisine). Conversely, states’ rights activists suffer no compunction rebuking the federal government for overreach. There are no nationally elected officials in Washington, D.C. — all were chosen from the states or the electoral college. Most diminishment of federalism, and empowerment of the federal government, was through the consent of the states’ representatives. The national checking account is so big, and states’ so limited, that financial considerations compelled acquiescence.
Unarguably, for the benefit of all Americans some national powers needed absolute preeminence to enhance civil rights, air and water quality, commerce, etc. Further, the pandemic demonstrated again the federal government excels in selected actions and state governments are superior for others.
American federalism has always been a partisan issue — the GOP are the modern advocates. But the left-leaning have reason to be equally suspicious of overreaching nationalism on key issues: privacy, immigration, environment, etc.
Saying “No” (especially to a second helping of pasta) is a difficult but must be learned by the states to prevent “unhealthy growth”.
Webb: The Biden administration agenda is producing the greatest federal government domination and dependency in modern history.
The nation’s founders clearly intended states to be equal partners with the federal government in the governance of the nation. But the national government enjoys an immense advantage — the ability to print and borrow money. That means it can shower down trillions of dollars on states, local governments, businesses and individuals for whatever purposes it deems appropriate, with little or zero state input.
But the money inevitably comes with strings attached and the federal bureaucracy grows ever larger. The “free” money obviously becomes very popular among both public and private recipients and a grave danger of growing dependency exists.
I don’t discount the federal government’s critical role in times of crisis. It appropriately takes action to prevent suffering and calamity. And I don’t believe individuals or states should turn down the money. After all, it is their taxes (or obligation to eventually pay the debt), so they should receive their fair share.
I’m also not suggesting that reasonable federal debt is inappropriate. But the proper economic theory is that debt is accrued in times of crisis, to bolster a faltering economy, and then is reduced or paid off in good times.
However, the unfortunate pattern for many years has been that debt soars in both good times and bad, under administrations of both parties. Some very wise people believe it is now reaching a crisis point and it won’t take much for the house of cards to collapse.
The Biden administration and Congress are proposing further sweeping legislation that further encroaches on the prerogatives of states. These include federalizing election procedures (which are currently overseen by state legislatures), a $15 per hour minimum wage, gun control, free college, and even prohibiting states from cutting taxes if they have taken federal relief funds. Will such legislation help or hurt the country?
Pignanelli: Restricting state tax cuts? The Supreme Court should strike this nonsense down, but the mere suggestion propels dangerous thoughts. No surprise Congress is considering further oversight of elections. Many politicians laid the groundwork by condemning state certified results. Respect for states’ rights doesn’t end because of ballot results.
The brilliant founders’ construction will prevent either measure from a long life.
Webb: Congress and the federal government are vastly overreaching their authority, creating more division and anger with one-size-fits-all regulation. Wyoming and New York are very different. On issues like gun control and the minimum age, why not let Wyoming be Wyoming and New York be New York? Half of congressional dysfunction could be eliminated by modestly accepting the diversity of our country.
Can states do anything to hold back the increased federal domination?
Pignanelli: Federalism must be a bipartisan issue. Otherwise, it will continue to be subject to the inconsistent whims of elections. The proposed “Repeal” constitutional amendment (introduced by former Congressman Rob Bishop) would allow a majority of the states to overturn any federal law or regulation. Serious consideration of this measure would send the right signals.
Webb: The galloping trend toward massive power concentration at the federal level will continue unabated until state legislators wake up and use the constitutional authority vested in them to resist and apply structural reforms, making states competitive in the federal system.