How to Stop Federal Coercion of States?
Let me start with my premise: Federal grants to states are unconstitutional. They involve Congress in policies beyond its enumerated powers, and they are inherently coercive -- the whole point is to bribe states to do things they wouldn't otherwise do.
Unfortunately, the Supreme Court has never struck down a federal grant program as being unduly "coercive." The issue came up again in the ObamaCare litigation, where it was argued that the expansion of Medicaid is coercive. I predict that the court will say that the Medicaid expansion isn't coercive on the grounds that states have a "choice" - they can choose not to participate in Medicaid.
The oft-repeated assertion that States have a "choice" is a fallacy. Governors face a situation in which their citizens have already been taxed to support Medicaid, highways, mass transportation, etc. If the Governor turns down the "free money" from Washington, the taxpayers will end up subsidizing the other 49 states. It's political suicide.
The best solution is to end all federal grant programs. But, short of that, is there a way to give States a real choice? That is: is there a way to allow States to opt out of federal programs and not have to subsidize the other states?
One way, I suppose, is the block grant approach. States that opt out of certain federal programs get a lump sum from Uncle Sam with no-strings attached. The States can then use the money to reduce their own tax rates, or pay bills, or whatever.
Or perhaps citizens of states that opt out of certain programs could get a tax rebate on their federal income tax. Now, I know that federal taxes are subject to the constitutional requirement of "uniformity." But the Supreme Court has allowed at least some geographic variations in taxation in Ptasynksi v. US (which upheld special tax provisions for Alaskan oil which did not apply to oil produced in the lower 48). Perhaps that precedent could be used to support different tax treatment for taxpayers in states that just say no to federal programs.
Any other ideas? Notwithstanding all the Tenth Amendment fervor out there, I'm having a hard time finding specific proposals to promote state autonomy.
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Feb '11
Re: How to Stop Federal Coercion of States?
The Constitution as amended is not strong enough, so you are looking for another solution? Good luck with that!
Nov '11
Re: How to Stop Federal Coercion of States?
My solution: eliminate the withholding tax, then allow states to choose to participate.
Do business in a state that doesn't participate in Medicaid? Don't pay that tax. Simple, easy.
May '10
Re: How to Stop Federal Coercion of States?
A more clear Amendment is in order:
Do it that way. The States will have to pick up the tab. If California wants to have cradle to grave healthcare, let them. All the things getting ready to bankrupt us go away. The states can figure it out. And if there is a disaster like Katrina, well then, the other states can step in and help them.
Re: How to Stop Federal Coercion of States?
Austin Murrey: My solution: eliminate the withholding tax, then allow states to choose to participate.
Do business in a state that doesn't participate in Medicaid? Don't pay that tax. Simple, easy. · 7 minutes ago
Austin, I'm not sure I understand. Isn't withholding simply a mechanism for collecting income tax? Even if employers don't withhold the taxes, wouldn't the citizen still have to pay?
Nov '11
Re: How to Stop Federal Coercion of States?
Adam Freedman
Even if employers don't withhold the taxes, wouldn't the citizen still have to pay? · 1 minute ago
In my solution, only if the state participates in a particular program.
On my paycheck I have withholding tax separated out showing how much of my taxes withheld are going to Income tax, Social Security, Medicare and Medicaid (it's probably a rough estimate, but it helps me see where my money's going). All of my wages are earned in a single state (not the case for some) so all my income falls under the Texas state income tax (there isn't any.)
If you eliminate withholding taxes, money is not funneled from citizens preemptively, they haveto pay taxes directly to the government - if you earn wages in a state that does not participate in Medicaid, you simply would not send that portion of tax money to the government because it is not owed, so no state is losing out on participating because their citizens don't send funds to the program in the first place.
Feb '12
Re: How to Stop Federal Coercion of States?
In my almost-always-humble opinion, the premise is spot-on. What follows is nibbling around the edges.
Iff we get a Republican House, Republican Senate, and a Republican POTUS, feet need to be held to the inferno. Every proposed new law, every new proposed regulation, every existing law, every existing regulation, every existing department, every existing agency must be strictly justified by the 18 enumerated powers in Article 1 Section 8 as written (original MEANING); or canned.
Aug '11
Re: How to Stop Federal Coercion of States?
I’m afraid the federal growth tumor is well established within our local governments. Like any cancer, there’s no easy way to remove it. It will take a multifaceted approach. Some programs, like NCLB, can be removed surgically. Some, like HUD, can be starved and privatized. Public transportation programs can be reverted to the states or privatized. Highway taxes can be block granted. And some coercive law provisions (example: motor voter) can be challenged as unconstitutional and defunded. The big Kahuna, Medicaid, needs to be completely rethought. Deregulation helps as well – take DOT for example. States are using new DOT rules as an opportunity to step up local fine and penalty revenue. That’s as coercive and corrosive as it gets.
May '12
Re: How to Stop Federal Coercion of States?
The Constitution is clear on the matter. The issue isn't another convoluted method to subvert the coercion, but stop it all together. Unfortunately, like so many issues, conservatives are scared to make an argument for fear of being branded heartless for thowing the benificiaries off a cliff.
The common sense argument for ending these programs is to challenge voters on how we feel about sending a $1 to DC, having it analyzed and then something less than $1 returned to us 'for our own good'.
Too often good basic arguments are intentionally not made because neither conventional political party has any interest in ending this foolishness. Tax dollars = power and the more concentrated in DC, the better for them.
Sep '10
Re: How to Stop Federal Coercion of States?
I think of this along the lines of "moral hazard". It is not that the programs are coercive (IMHO) so much as the incentives are so good that the states cannot help but do things they would not normally do. Block grants with less strings are a good idea, but what I would add is that the federal contribution should be a minority of the total cost.
This is arbitrary, but my sense is a limit of 33% should be sufficient to counteract much of the moral hazard. If the state had to come up with 2/3 of the cost they would act more responsibly. This might mean increased witholding for these programs at the state level (and hopefully less at the federal level). But even if there were no tax savings, this would be more democratic since state government is more responsive than the federal to the needs of their electorate.
I also realize that taking away some of the federal carrot might reduce benefits in some states, but even that might give us valuable information about what works and does not work as variations between states develop.
Edited on May 9, 2012 at 5:45pmRe: How to Stop Federal Coercion of States?
One way to start would be to pass a constitutional amendment outlawing unfunded mandates of all kinds.
Dec '11
Re: How to Stop Federal Coercion of States?
How long before it is interpreted into meaningless like the rest of the restrictions on government that progressives don't like?
Feb '12
Re: How to Stop Federal Coercion of States?
Adam---why wouldn't a state simply opt out of Medicaid? Isn't the federal money they get for being a part of Medicaid earmarked for that program?
I presume highway funds or some such might be cut from the state, but there are limits depending on (1) the administration and (2) how powerful the respective senators and representatives are within their bodies.
I'm a Texan. If Texas opted out of Medicaid, I presume many Medicaid recipients would simply leave to surrounding states. This would lower medical costs in Texas because hospitals wouldn't be forced to take cut-rates from Medicaid.
However, if Perry won't do it, no governor of Texas will.
May '10
Re: How to Stop Federal Coercion of States?
It's up to states and localities to refuse the money. Refuse the funds and pay your own way first. Then eliminate the legal "option" to suck at the federal teet.
We don't need to wait for federal consent to become financially independent.
Sep '10
Re: How to Stop Federal Coercion of States?
I should add that my "suggested solution" has the benefit of not being a radical one. It may not go far enough, but the conservative mind is one of incremental change so I guess it fits that.
This would preserve the federal governments "ability" to effect programs that are in the general welfare, but would hopefully limit their do-gooding to reasonable levels.
I can see problems however, highway funds are doled out around 50/50 at present. Some states are poorer and larger and have greater need for highway spending but less ability to pay even though it is in the federal interest to have the infrastructure.
Dec '10
Re: How to Stop Federal Coercion of States?
If we do not give it to them in the first place, they cannot attach strings to it so we can ge it back. The obvious solution is to reduce federal taxes to the level where it can only perform its specified duties.
I do not think this will happen.
Nov '11
Re: How to Stop Federal Coercion of States?
Foxman: If we do not give it to them in the first place, they cannot attach strings to it so we can ge it back. The obvious solution is to reduce federal taxes to the level where it can only perform its specified duties.
I do not think this will happen. · 11 minutes ago
Spot on - the only real solution is to starve the beast.
Mar '11
Re: How to Stop Federal Coercion of States?
I fear that federal grants will never go away, for the simple reason that they provide the perfect foil for taxpayers to think they are getting something for nothing.
The genius of federal grants is that they provide an opportunity for local politicians to provide something for free. There is an inherent demand for highway repair, healthcare for the impoverished and more funding for education. Usually, a politician who wanted to increase those services would have to raise taxes on his own constituents to pay for it. With federal grants, the local politician can reap the praise while the anonymous IRS does the dirty work of collecting the funds.
The reason federal funding of state affairs will never go away is because it essentially offers crack cocaine to local officeholders.
Mar '11
Re: How to Stop Federal Coercion of States?
Shane McGuire:
I'm a Texan. If Texas opted out of Medicaid, I presume many Medicaid recipients would simply leave to surrounding states. This would lower medical costs in Texas because hospitals wouldn't be forced to take cut-rates from Medicaid.
I'm not so sure. Many federally-funded state programs are welfare (like Medicaid) - and the impoverished tend to be less mobile.
If a state were to opt out of Medicaid, the immediate response could well be a rush to the ballot box to replace it with a state-run initiative - a move which would require a tax increase. What governor wants to bring that upon himself?
Re: How to Stop Federal Coercion of States?
Because even if a state decides not to participate in Medicaid, it cannot exempt its own citizens from having to pay Medicaid taxes. Assuming a state wants to enact some program of medical assistance for the poor (politically, I can't see a state having nothing), then the citizens would have to pay twice for medical assistance for the poor: once to fund their own state's program, and then again to subsidize Medicaid for the other 49 states.
Like parents who are forced to send their kids to failing public schools, the states should have some sort of voucher system that allows them to opt out of failing federal programs.
Edited on May 9, 2012 at 8:48pmFeb '12
Re: How to Stop Federal Coercion of States?
Armed rebellion?
Edited on May 10, 2012 at 6:46am