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Federalism Is Broken. Can It Be Fixed?

Our federal system is tied up in knots. We have to try to untie them.

Red rope tied in a knot.
Most everyone agrees that our intergovernmental democratic process is in shambles. It has become increasingly dysfunctional over the past two decades or more, but since the start of the current presidential administration it has gone into free fall.  

Looking back on the decline of what was once hopefully called the “new federalism” or “cooperative federalism,” I was struck by an observation made four years ago by Bruce Katz, who until recently was director of the Metropolitan Policy Program at the Brookings Institution. Katz wrote that most of the re-sorting and reform taking place in government was being done not through grand presidential addresses, blue ribbon commissions and formal negotiations between the federal government and its federalist partners. Rather, he argued, it was “happening by default due to the drift and dysfunction of the national government.”

Taking the optimistic view, Katz concluded that “the withdrawal of the national government as a reliable partner has led to a burst of innovation at the subnational scale. Federalism is being reinvented without the guiding hand or intentional participation of the federal government. States, local governments, private business and civil society are filling the vast vacuum at the center. This is the Next Federalism -- messy, uneven, chaotic, ground-up and quintessentially American.”

Katz was right about messy and chaotic. His optimism about reinvention seems like another story. After four years, the ruptured relations among the players in our federal system have only grown worse. California, the nation’s largest state with the world’s fifth largest economy, is making a point of defying Capitol Hill and seeking to set national policy on a wide range of issues from environmental regulation to immigration to predatory college lending. California has sued the feds more than 30 times since President Trump took office and has emerged as an alternate power center to Washington in the eyes of international allies.   

But it is hardly alone. States on both coasts, with leaders in both parties, have reacted strongly to the Trump administration’s plans to allow oil and gas drilling off the nation’s coastline, with many of them considering new legislation that would ban any drilling activity in their coastal waters, which stretch out three miles from their shorelines.

The number of multistate lawsuits against the federal government almost tripled in the first year of Trump’s presidency -- from 13 in each of the last two years of the Obama administration to 37 in 2017. Meanwhile, we have entered what may be an unprecedented era of state vs. local friction over guns, immigration, wages, taxation and a range of narrower issues that extend all the way down to the banning of plastic bags by municipal governments.  

The examples are so ubiquitous that a network of 19 regional advocacy organizations has created a new mapping service that tracks state interference with local initiatives in nine areas of regulation involving economic or racial discrimination, among them minimum wage, ride-sharing and rent control. Taking a candid look at the whole situation, it is hard to escape the conclusion that Katz was mostly right about the dysfunction, and mostly wrong about the progress. 

So what to do? At this current hyper-partisan moment, it is tempting to doubt that much is possible simply because there is no one in the Trump administration’s leadership with the interest, knowledge or political skills to devise a meaningful reform strategy for federal relations. There may be more resources in Congress, especially after the midterm elections have resolved questions of leadership. But designing a plan for any meaningful long-term solution will likely take a painfully long time.

As I’ve written before, there is a spark of interest in the U.S. House, where the leaders of both parties have cooperated in creating a bipartisan Speaker’s Task Force on Intergovernmental Affairs. All of the major associations of state and local officials are involved, as well as the National Academy of Public Administration, a nonpartisan network of more than 850 fellows from both academia and government at all levels who have experience in dealing with federalism issues. 

The academy has the opportunity to play a key role because of the quality of its participants. But achieving results will also require political and strategic savvy -- an ability to carefully align the carrots and sticks -- that members of Congress or those whom they entrust will have to provide. A great deal of talent and perhaps an even greater amount of will is going to be necessary if they are to get anywhere. 

The task force is in many ways modeled after the Advisory Commission on Intergovernmental Relations, which faded away in 1996 after 37 years in existence, largely because it had become politically irrelevant. That begs the question of how any new plan will be able to avoid the same fate.

Right now, members of the task force are engaged in carefully structured discussions about the focus and shape of a new federal strategy, taking into account all the difficult questions that will have to be addressed. But providing answers will be excruciatingly difficult.

Despite all the obstacles, however, we need to press ahead with some sense of urgency in developing a revamped federal strategy and structure. The task is likely to grow even more daunting in the next few years, given the federal government’s mounting debt problems and the slow growth in state revenues in the post-recession years. 

It’s a long shot. But we have to try.  

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