The Urgent Need for Intergovernmental Dialogue

Progress on priority issues like health care and retirement security requires coordinated strategies.
April 25, 2017
By Elizabeth K. Kellar  |  Contributor
Senior Fellow with the Center for State and Local Government Excellence and director of public policy for the International City/County Management Association

One of the saving graces of our country is our system of checks and balances, and that includes the balance of power between state governments and the federal government. That said, those checks and balances can make it very difficult to move forward on the priorities Americans care about -- infrastructure, public safety, health care, jobs, retirement security, and clean water and clean air, to name a few.

Even with the Republican Party in control of Congress, the White House and most state governments, our elected leadership struggles to find consensus on goals. Some argue that hyperpartisanship is the reason we have been unable to address our nation's challenges in a thoughtful way. While that is certainly a problem, the bigger issue is the failure to develop smart policies that integrate local, state and federal government programs. That requires much more communication among thoughtful leaders to identify a way forward.

Health care and retirement security are two urgent issues that require coordinated strategies by all levels of government. Any changes the federal government makes to the Affordable Care Act, for example, will have an immediate effect on state and local government programs, finances and capacity to provide services to those seeking health care. The related issue of retirement security is one that also needs thoughtful intergovernmental dialogue. So far, however, there has been almost no communication.

About half of Americans have no retirement savings, according to a 2015 report by the Government Accountability Office. And those who do have retirement savings worry that their retiree health care costs are growing faster than their savings accounts. To help the 55 million Americans who do not have access to a workplace retirement savings plan, several state governments have moved to set up "work and save" programs for private-sector workers. These retirement plans would not require employer contributions but would allow employees to be automatically enrolled in a professionally managed payroll-deduction plan that would pool their savings with others.

But without offering an alternative plan to boost retiree savings, Congress recently passed legislation to roll back Department of Labor rules that allowed cities to offer such plans. The House also passed a bill that would prevent state governments from offering such plans, and the Senate is expected to take up a similar measure soon.

Rather than bending to pressure from the financial-services industry and other private interests that oppose these savings plans, wouldn't it be better to have a structured conversation among federal, state and local partners to agree upon the goal and how best to reach it? What is wrong with allowing state and local experiments to go forward to determine if they can boost retirement savings?

With an aging population, this is no time for complacency. While state and local governments have made substantial changes to shore up their public-employee pension plans since the Great Recession, Congress has not tackled the long-term funding challenges of Social Security or Medicare since the 1980s.

All of our nation's safety-net programs require regular review to ensure that benefit levels are appropriate and that their funding plans are sound. The history of Social Security is worth reading to remind us that many adjustments have been made over time.

Local governments know all too well that if the states and the federal government cut back on health-care and retirement-security programs, the problems -- without the resources to deal with them -- will land on their doorstep. Intergovernmental cooperation is critical, whether addressing these issues or our other national priorities. Let's talk.