Editor's Note

Summer 2019 Insider

Editor's Note

The Federal Government 
Does Too Much

Aug 22, 2019 2 min read

One advantage of our federal system is that it sets up a kind of competition in policymaking. The ability of citizens to vote with their feet keeps states on the lookout for better ways of doing things. States that have problems in common can learn from each other’s experiences. Policies that work well in one state can be replicated in others. Most critically, states can discover what doesn’t work without having to impose a bad solution on the entire country. 

That’s how it’s supposed to work—in theory. In practice, federal lawmakers think there is nothing states do that shouldn’t be shaped by Washington’s priorities. We can see that hubris at work in three of our feature articles here, most especially in our cover story by Mike Nichols. He notes that there are now at least 1,386 federal grant-in-aid programs that spend $728 billion per year. Why, you might ask, must taxpayers send so much money to Washington, merely so that the federal government can send it back to the states? 

The answer is control. When the money comes back to the states, it comes with conditions on how the money must be spent. Those strings often compel state and local policymakers to make absurd choices. One case in point: $60,000 spent on an elevator in a middle school; the elevator is hardly ever used, but the expense satisfied a “maintenance of effort requirement” that guarantees the school district’s receipt of federal money in future years. 

There is a kind of prisoner’s dilemma going on: States may be free to make better choices by refusing the federal money; but the savings that such choices generate would simply end up being redistributed to other states. The only way to fix the problem is for Washington to decide to get out of the business of bribing states with taxpayers’ money. Whence will come the leadership for that agenda?

Washington has also interfered with state efforts to put the brakes on an abuse known as civil asset forfeiture. Civil asset forfeiture allows law enforcement agencies to seize property on the mere suspicion that it has been used in a crime and keep the property unless the owner can prove otherwise. As Darpana Sheth writes, the problem is not only that this shifts the burden of proof from the government to the accused, but that the process itself makes it difficult for property owners to even get a hearing before an impartial judge. 

Since 2014, 33 states have passed laws limiting the ability of state and local law enforcement agencies to use civil asset forfeiture. The federal equitable sharing program, however, lets local law enforcement agencies participate in joint operations with federal agencies and keep a share of the proceeds from forfeitures—thus evading state limits. States could pass laws forbidding their law enforcement agencies from participating in the federal program—and seven of them have. Congress, however, could do all citizens a favor by eliminating the equitable sharing program entirely and putting limits on the use of civil asset forfeiture by federal agencies. There are bills before Congress that would do just that.

States are also helping fix the mess Obamacare has made of health insurance. Seven states have used Obamacare waivers to create alternative financing programs that, on average, have reduced health insurance premiums by 7.5 percent from 2018. Non-waiver states saw an average increase of 3.1 percent. Yet some lawmakers still pine for top-down federal control of health care financing. They are pushing a bill that would create a Medicare for All program. As Kevin Pham details, universal health care entitlements have a history of reducing, not expanding, the supply of health care. Even worse, the bill would provide virtually no escape for either patients or doctors to contract outside of Medicare. If you like your health plan, too bad for you.  

Alex Adrianson

Alex Adrianson edits The Insider.
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