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How Washington Bribes the States

Michael Hogue

James L. Buckley is a dangerous man. He is able to persuade ideological adversaries to reconsider some of their fundamental public-policy assumptions. He has done this to me before, and now with his new book he has done it again.

Buckley is, of course, the estimable former senator and judge. In 1970, running on the Conservative Party ticket in a three-way race, Buckley won election to U.S. Senate from New York. On March 19, 1974, Senator Buckley publicly called for Richard Nixon to resign, declaring that the people had lost faith in the president’s moral authority. Coming from a conservative who himself possessed considerable moral authority, that was an arrow to the heart of Nixon’s strategy of attempting to persevere through the Watergate crisis by stonewalling congressional investigations.

Ultimately, however, Buckley was too conservative for New York, and in 1976 he was defeated in a two-candidate race—Buckley had both the Republican and Conservative Party nominations—by Democrat Daniel Patrick Moynihan. Buckley later served 11 years on the U.S. Court of Appeals for the District of Columbia Circuit, which is generally considered the second most important court in the federal judicial system.

I met Jim Buckley when I was working on a biography of his brother Bill, and from time to time we still communicate. I am a Burkean liberal, and our political differences are great. Yet he has the ability—through clear, commonsense exposition—to make me see things in a new light.

In his new book, Buckley argues for abolishing federal grants in aid to state and local governments. This is a radical proposal because grants have become a staple of our system. In the year that Buckley was elected to the Senate, federal grants in aid totaled $24.1 billion. This year, they will total $640.8 billion and account for 17 percent of the federal budget. So when Buckley says he wants to abolish them, he is arguing for nothing less than a sweeping redesign of modern government.

Federal grants are often used to persuade—Buckley might prefer the verb “coerce”—state and local governments to do things that the federal government wants them to do or to do things the way the federal government wants them done. The first such program was established by the Morrill Act of 1862, which granted federal lands to states on the condition that they be used to establish colleges teaching agriculture and engineering. President Buchanan vetoed an earlier version of that legislation because he believed it was unconstitutional, but after the Civil War broke out Congress added a requirement that the colleges teach military tactics too, and President Lincoln signed the law.

It was another war—the Cold War—that caused the next leap in federal grants. Arguing that the nation’s roads were inadequate for moving soldiers, equipment, and supplies during an emergency, President Eisenhower persuaded Congress to contribute 90 percent of the money to construct a new interstate highway system. And when the Soviet Union launched Sputnik—precipitating a national panic about our falling behind in science and technology—Congress enacted the National Defense Education Act of 1958, which provided federal grants to schools to bolster training in mathematics and science. But, writes Buckley, it was during Lyndon Johnson’s Great Society project that “grants-in-aid programs became epidemic.” By 1970, there were 530 such programs, and they consumed more than 12 percent of the federal budget.

Buckley does not like grants-in-aid programs for many reasons. He believes they distort state and local priorities. For example, Connecticut spent $113.34 million to build a new busway between New Britain and Hartford—not because it thought that was the best use of those funds, or even that a busway was very much needed, but because the federal government would contribute $459.35 million for the project. Politicians cannot afford to walk away from that many federal dollars. thisissueappears

On the flipside, Buckley contends that these programs distort federal priorities too. State and local governments work mightily to lobby for grants-in-aid programs. American cities collectively retain 400 lobbyists “to help them milk the federal cow,” he writes. And they milk it successfully. Federal grants now make up 30 percent of state revenues. In addition, argues Buckley, special interest groups have an easier time lobbying Congress to enact federal grants-in-aid programs than they would have lobbying the states individually for programs they desire.

Members of Congress spend too much of their valuable time on these programs, Buckley believes. They devote time to pressuring federal agencies to increase grants to their states and cities. And when constituents complain about local concerns, members of Congress curry favor by proposing a federal grants-in-aid program to address those problems rather than telling their constituents to take up the matter at the state or local level. Potholes in the street? A member of Congress will submit a bill to provide federal grants to municipalities for fixing potholes.

Buckley also doesn’t like grants-in-aid programs because they result in what Justice Sandra Day O’Connor described as “garbled political responsibility” in her dissent to a Supreme Court opinion upholding their constitutionality. Neither the federal nor the state government is clearly and fully responsible for a grants-in-aid program—either for the decision to undertake the program in the first place or for how well the program is implemented. State and local governments run the programs as dictated by federal rules, which allows everyone to escape accountability when programs aren’t working well.

Grants-in-aid programs encourage waste, Buckley argues. There is little incentive to be frugal with funds that are provided to meet someone else’s objectives and spent according to someone else’s dictates. Block grants would be better. For example, because the state was in financial crisis, in 2009 the federal government granted Rhode Island a five-year waiver from complying with Medicaid regulations. In return, Rhode Island accepted a cap on federal contributions to its Medicaid program. Previously, Rhode Island’s Medicaid costs per enrollee had been growing at an annual rate of 6.6 percent. But now Rhode Island had a strong incentive not to waste money—it was, after all, able to spend the money as it wanted to—and over the ensuing five years its Medicaid annual costs per enrollee growth rate declined by an average 1.5 percent compared to an annual national increase of 7.5 percent over the same period. The state’s secretary of state explained that the new arrangement “changed our culture of spending on Medicaid.”

There is merit to all of these objections to federal grants-in-aid, but perhaps the most persuasive is that these programs substitute a single, centrally planned program for a multiplicity of efforts by different states. For some things, this may be a strength. A centrally planned interstate highway system was probably better than leaving highway planning and funding to the states, for example. But for other things a great deal may be gained by a diversity of approaches. Justice Louis D. Brandeis famously wrote:

To stay experimentation in things social and economic is a grave responsibility. Denial of the right to experiment may be fraught with serious consequences to the nation. It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.

Buckley recounts that in 2009 the National Governors Association and the Council of Chief State School Officers announced they were developing a Common Core program, which was to include a set of standards and tests to ensure students achieved certain proficiency levels in math and English. The states were urged to set their own timelines—not to exceed three years—for adopting Common Core, giving them time to make considered decisions about whether to use this system or chart a different course. That same year the federal department of education announced its Race to the Top initiative, through which it was going to dispense $4.35 billion to the states through a competitive grant program. States applying for grants had to show they were working toward a common set of standards. They were also told that they would be awarded high points in the contest if, by August 2, 2010, they joined a consortium that included a majority of states. Meanwhile, Common Core released its standards on June 2, 2010.

Common Core was the only existing consortium, and if states wanted to compete successfully for their share of the billions of dollars to be dispensed, they had to rush to sign on. Considered decisions were impossible. To meet the deadline, Illinois, Oklahoma, and Mississippi invoked emergency measures to circumvent their legislative or administrative procedures.

The merit or lack of merit of Common Core is not Buckley’s point. He argues that the federal grants-in-aid program forced states to rush pell-mell into adopting a program that they should have considered more carefully—and moreover to adopt the same program. This troubles me greatly as well. Would not the nation have been better served if states followed a number of different approaches so that we could compare how they worked in practice?

Buckley recognizes that it would be impossible to eliminate suddenly all federal grants-in-aid. The states could not stand the shock of giving up the federal dollars cold turkey. He proposes that first all federal grants be converted to no-strings-attached block grants, along the lines of the Rhode Island Medicaid example, and then phased out over a period of five or six years. I can’t go all this way with him—not yet anyway. I would need a lot more information than is contained in his short book before concluding that all federal grants in aid should be eliminated.

But Jim Buckley has persuaded me that there are serious disadvantageous to grants-in-aid programs, that they are—at a minimum—grossly overused, and that we need a national conversation about them. He clearly hopes that his book, which can be read in one sitting, will start that conversation. I hope so too. 

Carl T. Bogus is a professor of law at Roger Williams University and author of Buckley: William F. Buckley and the Rise of American Conservatism

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