Home / Blog / Article

March 17 2010

The Feds are Making the State House the Poor House

Nicole Kurokawa Neily

Even though the health care debate has moved into the stage of bizarre, constitutionally questionable procedures in order to force an unwanted plan upon the American people, it’s still worth reminding people about some of the damaging effects it will have if it is implemented.

The Republican Governors’ Association has a clever video on the unfunded mandates that Obamacare will impose on states at whathappensinDC.org. Check it out:

As the video says, “What happens in Vegas may stay in Vegas. But what happens in DC… affects the entire nation. From Nevada to Iowa to Ohio, all the way to Florida and Massachusetts, too much of the President’s prescription for America would do more harm than good. His health care plan alone would raise taxes and shift millions of unfunded mandates to the states, forcing states to spend money they don’t have.”

Boy, the RGA isn’t kidding when they say that states don’t have extra money to spend! Today’s Wall Street Journal gives us a glimpse of the troubles that lie beneath:

Strapped states, facing up to $180 billion in budget deficits in the next fiscal year, are going hat in hand to Washington. 

California wants $6.9 billion in federal money for the next fiscal year, and Republican Gov. Arnold Schwarzenegger says he'll have to eliminate state health and welfare programs without it. Illinois, facing a $13 billion deficit that equals roughly half of the state's operating budget, has what it dubs a stimulus team and a group in Washington pressing for additional state aid. 

Among other things, Illinois is hoping the federal government will keep paying a higher share of Medicaid costs. "That's $600 million we desperately need," said Kelly Kraft, a spokeswoman for Democratic Gov. Pat Quinn's budget office. Those funds already are counted in the governor's budget proposal. 

But in Congress, members are balking at further subsidies amid an election-year outcry over the U.S. deficit and federal involvement in the economy. 

That tension sets up fierce battles as states work out budgets for the fiscal year beginning July 1. Because they can't run deficits, most states face yet more tough choices: raise taxes, cut services, lay off workers or trim employees' wages and benefits over union opposition.

As it turns out, federal stimulus money that went to states last year didn’t actually help. Throwing money at bloated state governments merely delayed the inevitable, while saddling states with additional obligations under federal law. A few governors, like Rick Perry of Texas and Mitch Daniels of Indiana, had the foresight to turn down the “free” money and the strings it came with. But the rest of the country’s governors weren’t as smart, and have dug themselves an even deeper fiscal hole than they were in to start with.

It should come as no surprise, then, that a backlash against federal overreach has begun. I’ve noted in the past state legislators’ efforts to promote freedom of choice in health care, but it looks like the movement has spread beyond that effort! As The New York Times reports:

“There’s a tsunami of interest in states’ rights and resistance to an overbearing federal government; that’s what all these measures indicate,” said Gary Marbut, the president of the Montana Shooting Sports Association, which led the drive last year for one of the first “firearms freedoms,” laws like the ones signed last week in South Dakota and Wyoming.

In most cases, conservative anxiety over federal authority is fueling the impulse, with the Tea Party movement or its members in the backdrop or forefront. Mr. Herrod in Utah said that he had spoken at Tea Party rallies, for example, but that his efforts, and those of the Patrick Henry Caucus, were not directly connected to the Tea Partiers.

And in some cases, according to the Tenth Amendment Center, the politics of states’ rights are veering left. Rhode Island, Vermont and Wisconsin, for example — none of them known as conservative bastions — are considering bills that would authorize, or require, governors to recall or take control of National Guard troops, asserting that federal calls to active duty have exceeded federal authority. 

Alas, there is no straightforward solution to this dilemma. Realistically, the federal government isn’t going to stop bribing states with federal money and overriding their sovereignty, despite the Constitution explicitly prohibiting it from doing so. Going forward, however, states should be mindful of the adage “he who pays the piper calls the tune,” and attempt to be as self-sustaining as possible in order to minimize exposure. If there ever was an argument for limited government, this is it: state governments of finite, defined purposes shouldn’t need vast amounts of revenue, and they certainly shouldn’t be dependent on federal pursestrings to exist.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
Follow us