Federalism And The Money Club

One of the segments of Michael Emerling’s excellent The Essence of Political Persuasion tape/CD series focuses on stories and metaphors. There’s a brilliant phrase in his treatment of welfare as a metaphor for drug addiction that I’ll never forget: “When a man has got you by the wallet,” as Emerling says, you pretty much have to do as he tells you.

As with men, so also with states.

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Have a gander at the Obama Administration’s latest attempt to destroy what remains of federalism:

The Federal Emergency Management Agency is making it tougher for governors to deny man-made climate change. Starting next year, the agency will approve disaster-preparedness funds only for states whose governors approve hazard-mitigation plans that address climate change.

This may put several Republican governors who maintain that the Earth isn't warming due to human activities, or prefer to take no action, in a political bind. Their position may block their states' access to hundreds of millions of dollars in FEMA funds. In the last five years, the agency has awarded an average $1 billion a year in grants to states and territories for taking steps to mitigate the effects of disasters.

"If a state has a climate denier governor that doesn't want to accept a plan, that would risk mitigation work not getting done because of politics," said Becky Hammer, an attorney with the Natural Resources Defense Council's water program. "The governor would be increasing the risk to citizens in that state" because of his climate beliefs.

The policy doesn't affect federal money for relief after a hurricane, flood, or other disaster. Specifically, beginning in March 2016, states seeking preparedness money will have to assess how climate change threatens their communities. Governors will have to sign off on hazard-mitigation plans. While some states, including New York, have already started incorporating climate risks in their plans, most haven't because FEMA's 2008 guidelines didn't require it.

Now, the amounts involved are relatively small compared to the typical state’s budget. That’s unlikely to make the threat ineffective, for a simple reason: state governments, including those whose budgets balance, prefigure federal monies into their budgets. The states’ budgets wouldn’t balance without the Washington bucks. The federal money arrives preallocated – pre-spent. It’s been that way since Nixon introduced “revenue sharing” in 1972.

So the governors and legislators of those states, having unwisely allowed Washington to “get them by the wallet,” face a tough choice: kneel before Leviathan’s decrees, reduce expenditures in some area, or try to squeeze more revenue out of their citizens. When the state government is Republican-controlled, as so many of them are today, that’s a highly unpalatable menu to choose from.

You might think, state taxation being far less than federal taxation, that citizens might shrug off a “tiny” increase in the state sales or income tax. That never proves to be the case. State governments have wholly changed hands over as small an increase in a sales tax as a half-cent on the dollar. Taxation is currently the number-one reason for personal and corporate relocations, and the politicians know it.

The disbursement of Treasury monies to the states, under whatever rationale, constitutes a club whose backswing no state government wants to get hit by.

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The entire point of federalism – the reservation of all unenumerated powers to the states and the people by the explicit terms of the Tenth Amendment – is that our unum contains quite a lot of pluribus. Quoth Robert Tracinski:

Let’s be two Americas.

That’s what everybody’s always complaining about, right? We can’t have “Two Americas.” But what if it’s not such a bad thing? What if this was actually designed into the original American system and is the way things were supposed to be? And maybe it would lead, not to more conflict between the two Americas, but less.

I know this may raise a bit of a visceral reaction. We’re supposed to be e pluribus unum—from many, one. It’s the motto on the Great Seal of the United States, for crying out loud.

But the Founders who chose that motto in the first place still believed very strongly in the pluribus. In fact, they gave the unum very little to do, concerning itself with national defense, international trade, and resolving a few high-level legal disputes. Most government was left to the pluribus, to the states, to run as they saw fit.

Back then, of course, government was unbelievably small by today’s standards. And that’s part of the reason we ended up messing up this original federal system: the self-declared “progressives” hatched so many enormous ambitions for what the government was supposed to do that only the federal government could concentrate the massive sums of money and power required.

That last paragraph is a bit more generous to the “progressives” than is warranted. Scratch a “progressive” – doesn’t matter which one – and you’ll find a steel-fisted fascist who’s resolved to go to the limits of human ambition and power to make you do as he demands. The word itself should be the giveaway, for if “progress” is not universalized – if there are persons or communities that, for whatever reason, don’t partake of “progress,” then true “progress” is not being made. After all, there are already persons who’ve “progressed” – the “progressives” themselves, right? – so if there’s to be true “progress,” it must perforce embrace everyone, including any benighted types who fail to appreciate its glories.

“Progressivism” is the antithesis of federalism.

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As far as I know, no state has resisted the lure of federal money. I believe the first steps in that regard came with the federal highway system, an Eisenhower Administration project, but the scheme really took off with Nixon’s “revenue sharing” program.

The beast has many tentacles today. Washington has so many money clubs to swing that a state government wholly peopled by libertarians would find it hard to avoid them all. Some of those clubs even take aim at private institutions, such as private colleges and universities. Federal regulation of collegiate curricula and campus life is justified by the expenditure of federal money on college campuses...even when the money arrives as a federally administered loan, not to the institution but to the student.

The game has been in progress for decades. FEMA’s gambit, done in service to the warmistas, is merely the latest of its kind. Watch the state governments, especially those now in Republican hands. The sincerity of the officeholders those states’ voters elected will be tested by this throw, perhaps rather severely. The outcome will provide useful data points for those who continue to believe that political engagement in the cause of freedom is still worthwhile.