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Editor's Notebook: More power to the states. But do governors and lawmakers really want it?

Peggy Boyer Long
WUIS/Illinois Issues

Governors may have reason to remember the old adage on being careful about wishes.

The move to shift responsibility for social welfare programs from the federal government to the states has definitely picked up steam under President George W. Bush. 

Proponents of devolution, so called, promote it as a way to give the states flexibility to reinvent social policy, to tailor it to local needs. And that’s something state officials have devoutly wished for. 

But the reality of this growing trend, coming as it does in the midst of a deep economic downturn, will require the nation’s governors and state legislators to be especially creative and resourceful, just as many find themselves staring into the worst budget hole in a generation.

The shift shouldn’t come as a surprise. Some of those state officials who have been most outspoken about giving states room to innovate — former Wisconsin Gov. Tommy Thompson comes to mind — now work in the Bush Administration.

And Bush, himself a former governor of Texas, made it clear at the outset of his tenure in the White House that he wants to give states more leeway in devising and executing the programs that affect them. In Robert Pear’s analysis, written as President Bush was settling into that office, the New York Times reporter predicted Bush would grant flexibility in social, regulatory and public works programs. 

“Across the spectrum of domestic policy issues,” Pear wrote, “from health and welfare to education, transportation and environmental protection, the new administration promises to shift power from the federal government to the states, and state officials of both parties said they expected the promises to be kept.”

Indeed they have. Over the past year, the Bush Administration has rolled out a lengthening list of programmatic responsibilities it wants to devolve to the states. We have written about some of those programs in recent issues of this magazine, among them health care and housing subsidies for the poor.

State Sen. Steven Rauschenberger calls this trend healthy. He’s an Elgin Republican and the GOP point man on budget matters in his chamber. “States,” he says, “are being treated with more respect under the Bush Administration than they have been.”

 

Rauschenberger would be called a strict constructionist when it comes to the 10th Amendment of the U.S. Constitution. “The feds should stick to national defense, foreign policy and banking,” he says. “The feds are a poor arbiter of social needs.”

As for the timing of this shift, he says there’s always risk in a cyclical economy. “The states have been dealing with that for 50 years.” 

If Congress and the president give the states authority and spending flexibility in social programs, Rauschenberger says, there will be successes. His only concern is that the federal government won’t stick with the program. If national leaders see successes in the states, he worries, they may want to reregulate. 

There has been tension over relative federal-state powers, an evolution in devolution, if you will, for more than 200 years. 

To be quick about it, the drafters of the nation’s constitution were intent on circumscribing federal powers, though Alexander Hamilton may have loosened the bonds when he created a national bank and set about to bail the new states out of debt. That was perhaps the first time the central government saw itself as working for the common good of the states and the nation as a whole.

Nevertheless, the power of the states remained paramount until the 1930s. Then, in the midst of the Great Depression, President Franklin Delano Roosevelt rewrote the social contract — and the relationship between the federal government and the states. His New Deal constituted a major shift in the direction of centralized power when the federal government assumed responsibility for the social condition of individuals.

Now that social contract and the federal-state relationship is being rewritten again. 

Devolution, as we have written in this magazine, was the centerpiece of Newt Gingrich’s 1994 Contract With America. It was behind the 1996 law that shifted responsibility for welfare, the nation’s income assistance program, to the states. Under that reform, due to be reauthorized, states get block grants from the federal government and almost complete control to determine eligibility and benefit levels.

The Bush Administration would shift responsibility for Medicaid, the program that covers health care for poor people, Section 8, the federal government’s most common type of rent subsidy (see Illinois Issues, September, page 27) and Head Start, the program that provides preschool services for low-income children and social services for their families. 

No surprise, service providers and liberal policy analysts argue that some in national politics are really out to dismantle social entitlements — and shrink the federal government. Block grants, they argue, are unlikely to keep pace with costs.

Their strongest case-in-point on that score is Bush’s plan to overhaul Medicaid. Many governors, even Bush’s brother Jeb, the governor of Florida, have raised concerns. Some worry the plan won’t protect their states from unforeseen costs.

As we wrote in April (see page 20), governors, in return for the desired authority to manage that shared federal-state program, would get responsibility for keeping Medicaid costs in check. And that won’t be easy, especially in a sour economy when more people are in need. For many states, including Illinois, Medicaid appropriations have outpaced other key categories of spending.

As with other programs, Bush would transform open-ended entitlements into capped allotments, these to run over the next decade. The federal government would no longer reimburse states for a percentage of their Medicaid spending. 

The problem is that state officials in Illinois and elsewhere don’t want to — and likely can’t — say what will happen to Medicaid spending over the next decade.

Gov. Rod Blagojevich, who faces a two-year $5 billion deficit, has taken a wait-and-see approach to Bush’s Medicaid plan. He has criticized outright the plan to devolve Section 8, writing in a letter to federal officials that the state is unprepared to run a housing voucher program — and can’t afford to.

The Bush Administration, which faces its own fiscal problems — a cumulative deficit estimated by the Congressional Budget Office to reach $2.3 trillion by 2011 — seems undeterred. 

This raises red flags for critics. Lenny Goldberg, in a 1996 piece for

 The American Prospect

, has gone so far as to argue that, in this era, shifts in federal-state responsibilities constitute a deception. Entitlements, he contends, are being eliminated under cover of block grants. 

Governors may get their wish for authority, but not for resources. If so, they’ll be left to make the hard choices on what to kill and what to keep. 

 


Peggy Boyer Long can be reached at Peggyboy@aol.com.

 

Illinois Issues, October 2003

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