Saving Congress from Itself. James L Buckley

free to decline federal assistance and thus preserve their autonomy; and fourth, the grants provide a mechanism for the redistribution of money from wealthy states to the poorer ones, thus making it easier for the latter to maintain the educational and other standards to which all Americans are entitled. Each of those arguments has its limitations.

      It is true that Washington is far better able than the states to call on the best academic and professional talent in designing programs. But that argument begs the question of whether any body of experts, however wise, will be able to come up with a single best approach to the provision of a social safety net or education or a host of other government services in a country as large and diverse as ours. Nor is it clear that the solutions academics produce on paper will work as expected when put into practice. The fact is that there is no evidence that federally mandated standards have ensured better results than those the states have fashioned on their own; and, as will be demonstrated in my discussion of costs, those standards can prove very expensive.

      Take education as an example. As the quality of our public schools is of particular importance, it is worth noting that Washington’s first significant involvement in education began almost fifty years ago with the enactment of the Elementary and Secondary Education Act of 1965. Yet as Andrew Coulson has demonstrated in his exhaustive 2014 study, “State Education Trends,” during the succeeding decades there has been no improvement in the quality of education nationally “despite the near tripling of the inflation-adjusted cost of putting a child through the K-12 system.” In the one jurisdiction for which the federal government has constitutional responsibility, namely the District of Columbia, it has been abysmal. In recent years, the federal government has focused on raising standards though President George W. Bush’s “No Child Left Behind” program and President Obama’s “Race to the Top” with, at best, mixed results to date. As I will demonstrate later, however, federal educational initiatives have placed extraordinary burdens on the states.

      With respect to the second argument, it is also true that it is far easier for Washington to raise money, whether through taxes or borrowing. States are required to balance their books and their ability to borrow is restricted. Those restrictions impose a discipline on the states that is not to be found in Washington because the federal government has a virtually unlimited ability to borrow. Its debt, however, is rising at an alarming rate and, in time, that debt will have to be repaid. What must be stressed is that the money that flows into Washington comes either from taxes paid by residents of the states or from loans that will have to be repaid by their children or grandchildren. The ease with which Washington can borrow is not an advantage; it is a growing problem.

      The third argument is true as far as it goes. States are indeed free to decline participation in federal grants programs. The reality is that in only the rarest cases are they able to resist the offer of money from the federal government. I recall the testimony of a southern governor who appeared as a witness at one of my Senate Public Works Committee hearings. He described the punishing political flak he had endured when he had the temerity to decline forty percent federal funding for an urgently needed state highway project. He had declined it because abiding by the federal rule book would have delayed the project’s completion by three years and required compliance with standards more appropriate for Alaska than his state. Adherence to the standards would have increased the project’s cost to such a degree that the governor was able to save money and a substantial amount of time by forgoing the federal grant. The irresistible political pressure produced by the offer of federal money was neatly captured in a March 3, 1971, Wall Street Journal editorial by Robert L. Bartley that discussed the “gold-plated octagon problem” lamented by officials in Washington. Their thesis was that if Congress were to enact a law offering to reimburse half the cost of erecting gold-plated octagons, every town in America would soon have one.

      I acknowledge, however, that Obamacare’s attempt to achieve a major increase in Medicaid enrollment has met with unprecedented resistance despite its provision for one hundred percent federal financing during the program’s first three years. As of August 2014, twenty-one states have declined this offer because, over the years, federal prodding and inducements had already caused Medicaid to become the largest expense on state budgets. In recent years, there has been increasing question as to whether the accompanying federal rules permit the most effective ways of ensuring adequate health care for the poor. There is also concern that Obamacare’s raising of the eligibility level to 138 percent of the Federal poverty line, in combination with other welfare measures that are devoid of work requirements, will create disincentives to securing employment that could lead to permanent dependency. As a number of governors have pointed out, work requirements were the key to the 1998 welfare reform’s success in reducing welfare rolls and putting people back to work. In the view of those governors, the acceptance of even one hundred percent federal financing during the initial years would have locked their states into a set of federal eligibility standards and regulations that would cripple their ability to achieve necessary reforms. Those considerations explain this atypical refusal to take the federal bait.

      With respect to the fourth defense of grants-in-aid, it is true that the programs effect a significant transfer of money from the have to the have-not states. In 2005, for example, Connecticut received 69 cents in grants for every dollar it sent to Washington. By contrast, New Mexico received $2.03. Thirty-two states are net beneficiaries of this redistribution and that, in turn, provides their representatives in Congress with a special incentive to support those programs. There are, of course, some strong arguments in favor of this redistribution: the have-not states may not be able to afford the quality of services, such as education, that the richer ones can provide. As I will explain later, however, if federal transfers from the haves to the have-nots are indeed justified, there is a more effective way of accomplishing that goal without saddling the recipients, rich and poor alike, with tangles of federal regulations.

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       THE PROGRAMS’ COSTS

COSTS TO THE FEDERAL TREASURY