A Decade To Remember

10 years, 10 highlights for federalism.
by | February 2010

Donald F. Kettl

Governing columnist, former dean of the School of Public Policy at the University of Maryland, and a nonresident senior fellow at the Volcker Alliance and the Brookings Institution

Now that the New Year's champagne has lost its fizz, it's time to size up the state of American federalism. Here is my list of the top 10 game changers during the decade of the aughts:

1. Census (2000). Take the decennial count, add personal computers equipped with mapping software and presto - there's a new game where incumbents can create safe legislative districts and permanently lock in their advantage. Reapportionment shrank the number of marginal seats and increased the level of conflict between increasingly polarized political parties. That made it harder for everyone to govern and for newcomers to run.

2 .9/11 (2001). Everyone conceded the need to do a far better job connecting the dots, but as the feds fought over who was in charge, state and local governments often found themselves alone on the front lines of first response. We've done a lot better in pulling the emergency systems together, but too many of the dots remain unconnected.

3. No Child Left Behind (2002). The George W. Bush administration's signature domestic initiative had broad support. Who favored leaving children behind? But no one was very happy about the way it worked out. Local school districts complained that the program imposed unfunded mandates. Attacking the program was one of the few things Democratic presidential candidates agreed on in 2008, but finding a fix is proving very hard without pumping in a lot more cash.

4. John Roberts named chief justice (2005). The William Rehnquist court left behind a long string of decisions expanding the power of the states at the expense of the feds. Although it's still a bit early to determine the mark of the Roberts court, the Rehnquist "federalism revolution" is ebbing in favor of a much more pragmatic approach. The court, however, is just one vote away from sliding toward a new revolution in states' rights.

5. Katrina (2005). The storm not only devastated the Gulf States, but also left a major city in near-anarchy and made FEMA a dirty word. The feds concluded that they made a big mistake by trusting state and local officials to deal with really big problems. In the aftermath of the Katrina fiasco, the feds have quietly decided they'll be quicker on the trigger with a mega-federal response the next time a big disaster occurs.

6 Minneapolis bridge collapse (2007). When the I-35W bridge came down in the Twin Cities, the nation got a stunning reminder of the crumbling state of its infrastructure. Cable failures on the San Francisco-Oakland Bay Bridge, the shutdown of I-95 in Philadelphia to repair a crumbling bridge, and the implosion of a major bridge connecting New York and Vermont underlined the emerging crisis. Great video, little action.

7. Ireland rejects European Union reform treaty (2008). Voters decisively rejected the EU's plan to smooth out battles among its states, create a new president and strengthen foreign policymaking. Kudos to James Madison and the gang from 1787 - this federalism stuff is a lot harder to create and sustain than it looks.

8. Economic meltdown (2009). As the rest of the economy staggered back to its feet, state and local governments continue to battle the long-term effects of the Great Recession. At the end of 2009, state and local tax revenues were down 7 percent over the dismal previous year. Almost every state is looking at big deficits for fiscal 2011. Mayor Scott Smith of Mesa, Ariz., told The Wall Street Journal that he wasn't sure if his city's services would ever return to previous levels. "We are redefining what cities are going to be," he says.

9. New transparency (2009). What's not to like about tens of billions of dollars in stimulus money? The cash, though, came with lots of strings. Loads of information delivered through Recovery.gov became the new accountability, and it's a safe bet that this "new transparency" will endure long after the stimulus money is gone. Everyone agrees transparency is the answer. No one really knows what it is going to mean.

10. Health reform (2009). As the "public option" evaporated from the debate, the states became even bigger players in the national health-care reform effort. A close reading of the proposed bills, however, revealed that the feds had taken to writing in state agencies as if they were agents of the federal government. In practice, of course, they long have been. The frantic drafting process of the health-care reform bills simply stripped away the old pretense and laid bare the way Congress really thinks about the states.

Where does this leave us as the new century grows into its teens? We've changed a lot since the 1990s, when the states were in the driver's seat of domestic policy and the governor's mansion was the proving ground for presidential candidates. Take away item No. 4 - with the balance of the U.S. Supreme Court's views on federalism teetering on the next appointment - and the feds are steering the system.

It's hard to see concerns about terrorism ebbing away, and health reform is likely to cement the federal government's pre-eminence. It will be hard for state and local governments to fight back when their coffers are dry and the feds can tip the game with vast infusions of cash borrowed from foreign investors.


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