March | April 2017


Seeking ‘A More Perfect Union’

Federal-State Relationship Strained and It Could Get Worse

By Jennifer Ginn, CSG Associate Editor
The situation is bad between federal and state governments and it doesn’t look like it’s going to get better anytime soon.
The Council of State Governments’ Focus on Federalism Task Force conducted its first meeting in September at CSG’s 2013 National Conference with a hearing focused on how intergovernmental relations have gotten so bad and what can be done about it. The task force is a two-year effort of CSG to “explore options for repairing the relationships between state and federal governments,” said Alaska Sen. Gary Stevens, CSG’s 2013 chair.
“State-based innovation, unfortunately, is being impacted increasingly and seriously by a growing web of federal policies and regulations,” Stevens said. “Our goal with this initiative is not to advocate for something predetermined. … Instead, we want CSG to serve as an open forum. It will be member driven; we want to learn from the experts.”

How We Got Here

John Kincaid, a professor of government and public service and director of the Meyner Center for the Study of State and Local Government at Lafayette College in Pennsylvania, said state and federal governments coexisted peacefully without much interaction for much of the nation’s history. The federal government began getting more involved on the state level following the Great Depression and all of the social welfare programs created to combat it in the 1930s.
“We had the rise of social welfare as a federal responsibility as reflected in the Social Security Act of 1935,” said Kincaid, “which still remains the fundamental social welfare law in our country. … There were relatively few intrusions into the prerogatives of state and local governments, so most activities of the New Deal had the strong support of the states and the local governments.”
With the civil rights movement in the 1960s, the shift to coercive government began. Pre-emptions began to increase dramatically, more federal aid began to be earmarked for specific programs, more criminal offenses began to be federalized, and both funded and unfunded mandates took root.
“The contemporary period has also been characterized by what I call the dismantling of intergovernmental institutions,” Kincaid said. “OMB (the federal Office of Management and Budget) no longer has an intergovernmental office. The House and Senate in Congress used to have intergovernmental committees. The Advisory Committee on Intergovernmental Relations was defunded in 1996. So the institutions established to promote intergovernmental cooperation have disappeared.”
This disengagement of the federal government from state and local governments, coupled with growing partisan rhetoric, has left the country in a state where only 19 percent of people trust the federal government and 46 percent of Americans believe the federal government poses an immediate threat to their rights and freedoms, Kincaid said.
“Those are very frightening figures if you think about it,” he said. “That is an astounding result. It reflects the sharp polarization and some serious problems in our political system that clearly need to be addressed.”

States Growing

Former Vermont Gov. Jim Douglas, CSG’s president in 2006, said the federal gridlock engulfing Washington, D.C., is shining a new light on state government.
“Last year, I guess, the highlights of (federal) legislative action were authorizing some post offices and some commemorative resolutions,” Douglas said. “They haven’t passed a budget in quite a long time. So the states are where it’s at. That’s where the action ought to be, especially at this time in our national history.”
States still are the laboratories of democracy, Douglas said, but it’s getting harder for state policymakers to get the authority from the federal government to try new things.
“In the Medicaid area, the largest grant relationship between the feds and the states, the increased use of waivers allows more state experimentation and flexibility,” he said. “But it’s a very onerous process and a number of us have talked to (U.S. Department of Health and Human Services) Secretary (Kathleen) Sebelius and asked if the states are granted a similar type of waiver, why does each one have to go through this cumbersome process to do it. Why not make it into the Medicaid program overall?”
Douglas said regulations are a growing concern for him.
“The amount of regulatory activity … has declined a little bit lately in a way that concerns me,” he said. “There’s a lot of what we call agency guidance that’s replacing the formal rulemaking process. In state government, we call it a desk drawer regulation, where there isn’t the kind of transparency and openness, public participation. … (It’s) just kind of quiet advice from an agency on what to do and how to react to a requirement.
“I think we need to insist on the kind of openness that the formal rulemaking process requires.”

It’s Worse than It Looks

One thing the Federalism Task Force members learned at their first hearing is the atmosphere in Washington, D.C., is probably even worse than they thought.
“It’s poison in Washington, you see,” said Michael Bird, former senior federal affairs counsel for the National Conference of State Legislatures. “The partisanship is so intense and so high and it unfortunately … is trickling down, so you really have a barrier to addressing some of the things we’ve been talking about. … Every now and then, something slips through, but for the most part, the poison actually prohibits them (Congress) from actually doing their responsibilities. They really can’t do their job.”
The deference Congress used to show to governors and state legislators is long gone, said Bird.
“Special interest issues and campaign financing are all tied together,” he said. “Even in some offices of members of Congress—some of whom have served in state legislatures or as governors or as local officials at one time—they see you as a special interest, no different than anyone who’s representing the private sector or a moneyed interest of some type. That’s another hurdle that has to be addressed.”
Former Maryland Gov. Parris Glendening, CSG’s 2002 chair, said Washington must get away from using issues such as immigration and the Affordable Care Act as a wedge to widen the gulf between the parties.
“First is the need to return to a more civil, bipartisan dialogue about how to solve the challenges facing this country,” Glendening said. “We all know the vitriolic rhetoric of the past several years and we anticipate with dread the tone of the debate of the next several years as we go into handling the fiscal crisis, the sequester, implementation of taxes, deficit cuts, debt ceiling.
“These hot button issues have become sources of increasing the temperature of the rhetoric. I will not rehash how we got to this low level of discourse or who is to blame,” he said. “It is clear, however, that it is time for everyone to calm down and focus on doable solutions.”

What are the Solutions?

Kincaid said re-establishing some of the now-defunct intergovernmental groups is a key to restoring a more thoughtful and effective relationship among the federal and state governments.
“I think they (intergovernmental groups) would be of assistance. The question is whether there would be the political will to do that,” he said, “because those institutions are very much dependent on sort of a bipartisan attitude. Whether we can institutionalize that today, I think, is a difficult question. At a minimum, it would be worth trying to get both houses of Congress to restore intergovernmental entities reflecting both parties that is focused specifically on these issues.
“I think it’s worth looking at insisting that the White House have some kind of intergovernmental office that is more than just political, but also has a policy role.”
Kincaid noted that such an office would fit particularly well within the Office of Management and Budget and should be tasked with “looking very carefully into the impact of federal policies on state and local governments, particularly the regulatory side.”
Bird said all the groups representing state and local governments should work together to try to force the federal government to take a new look at intergovernmental relationships.
“I think elected officials have got to demand more from an incoming administration,” Bird said. “You’ve got to ask much more than, ‘Hey, I’d really like to be invited to the White House Christmas party.’
“I think the Big 7 has very low expectations of Washington, D.C., and you need to heighten them. They expect too little of what comes out of any administration or Congress.”
But how likely is the federal government to change? Speakers at the Federalism Task Force hearing did not seem optimistic.
“I think the major problem is the polarization of the political system in Washington,” said Kincaid, “where ideology is the most important thing on both sides of the aisle. … I think until we solve that polarization problem, it’s going to be very difficult to solve the federalism issue.”
Bird agreed.
“The partisan rhetoric, we can order it to be toned down, we can beg for it to be toned down,” Bird said. “But we’ll make no progress until it is. I’m an optimistic guy and I don’t see things changing in any great way.”