Bluegrass Beacon: The seduction of states

BluegrassBeaconLogo

“When our emotions are engaged, we often have trouble seeing things as they are,” Robert Greene writes in his international bestseller “The Art of Seduction.”

It happens frequently with politicians.

When the federal government waves big money in front of state lawmakers – especially for sexy projects that politicians can rush back to their districts, wave big checks and claim credit for – it’s almost impossible for policymakers from a poor state like Kentucky not to feel the euphoria and gladly accept it.

Federal dollars now comprise more than 35 percent of Kentucky’s general revenues. More than $8 billion of the $23 billion that Kentucky collected in general revenues in 2013 came from Washington. According to State Budget Solutions, only four states received more federal-aid dollars than Kentucky.

Nationwide spending on federal grants to states and local governments has grown from $24 billion in 1970 to $640 billion today. In 2010, there were 1,100 different grants totaling $608.4 billion – 17 percent of the entire federal budget – waved in front of states.

Most troublesome is the rapid growth we’ve seen in federal grants-in-aid spending in states just since the turn of this century.

The number of state depending on the federal government for at least one-third of their total revenues has more than doubled – from 11 in 2001 to 24 states in 2012 to 30 states in 2013. Only nine states have not increased their dependency on federal-government revenues since 2001.Don’t be fooled into thinking that Washington is just filled with benevolent betters who simply want states to have resources to spend as they see fit.

An increase in federal funding results in a corresponding decrease in state and local control “while threatening the states’ long-run autonomy,” writes Washington Examiner commentator David Freddoso. “The reason is that with federal patronage comes federal leverage.”

Perhaps no more blatant example of this occurred when the Obama administration threatened to cut off all federal matching funds if states didn’t expand their Medicaid programs.

While that particular scheme was struck down by the Supreme Court, the courts dismayingly have upheld the right of Congress to wave federal dollars to get states to submit to its authority – even when such power is completely outside the feds’ constitutional purview.

“Congress may achieve by seduction what it has no power to compel directly,” James L. Buckley writes in his new book “Saving Congress from Itself: Emancipating the States and Empowering the People.”

In 1987, for example, the high court in South Dakota v. Dole upheld the constitutionality of withholding federal funds from states whose legal drinking age did not conform to what Washington wanted.

The court’s majority completely ignored limits on federal power and the Ninth and Tenth amendments – which place a majority of authority in states’ hands – and instead ruled that the Constitution’s “general welfare” clause essentially invites the federal government to seduce states with its money.

However, “if the spending power is to be limited only by Congress’ notion of the general welfare, the reality … is that the Spending Clause gives power to the Congress … to become a parliament of the whole people, subject to no restrictions save such as are self-imposed,” Justice Sandra Day O’Connor wrote in her Dole dissent. “This was not the Framers’ plan and it is not the meaning of the Spending Clause.”

The debate here is not about whether establishing a legal drinking age, education al standards, requiring seatbelts or myriad other policies forced upon states by Washington are good or bad ideas.

Rather, it’s about which scope of authority – the feds or state and local governments – is most constitutionally appropriate in which to enact such policies, and whether Washington’s use of seduction to get its way is acceptable.

Jim Waters is president of the Bluegrass Institute, Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.