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What Happened to Federalism?

Washington used to know how to listen to the states; there was even a commission for intergovernmental relations. Can Washington overcome politics and partisanship to work together again?

FlickrCC/Metal Chris
It’s spring in Washington -- that time of year when state and local leaders from across the country convene in hotel conference rooms to discuss how congressional and executive action (or inaction) affects the way they do business. These days, if you didn’t know better, you’d think they face a full-on assault.

When it comes to infrastructure, they’re worried Washington will yank away the tax-exempt status of their municipal bonds, making publicly financed construction more expensive. When it comes to taxes, they’re frustrated that Congress still hasn’t given them the ability to collect revenue from online sales, more than a decade after e-commerce went mainstream. When it comes to budgeting, they’re frustrated that congressional appropriators seem to cut with a meat axe rather than a scalpel. As Salt Lake City Mayor Ralph Becker said during a recent D.C. trip, “All of us who deal with the federal government and Congress are just pissed.”

Read the May issue of Governing magazine.

But imagine a world where state and local officials weren’t on the defensive and instead had the chance to have serious policy talks with their federal counterparts. A place where county executives and state legislators sat side-by-side with senators and cabinet secretaries. A place where some of the country’s most serious researchers could work in a nonpartisan way on topics that explored the federal-state-local relationship, with the backing of federal money.

That place did exist -- for nearly 40 years -- as the U.S. Advisory Commission on Intergovernmental Relations (ACIR). With Washington tackling issues like how to implement the president’s health-care law, overhaul the immigration system, reduce the deficit and adjust our tax code, many state and local thinkers are murmuring that it may be time to revive something like the commission, which closed shop in 1996. But with the cloud of partisanship hanging thick over the nation’s capital, others wonder: Is it naive to think the idea of intergovernmental relations still matters?

President Dwight D. Eisenhower signed legislation creating the ACIR in 1959. The commission was asked to identify rising issues facing the federal system and make recommendations to policymakers on how to act. It emerged at a unique time in the country’s history: Party polarization was at a low point, and the feds were starting to expand the grant-in-aid system that would have a profound impact on states and localities.

The commission had a distinctive structure that emphasized political balance. Its 26 members came from federal, state and local government; included representatives from both parties; and drew from the executive and legislative branches. Supporting the group was a professional staff of 15 to 30 that produced reports and research and functioned something like a think tank. “The theory was that if you had a bipartisan group of federal, state and local officials reaching some agreement on policy recommendations, that that would kind of point the way for Congress to do things,” says John Kincaid, a Lafayette College professor who served as executive director of the ACIR from 1988 to 1994.

The group was especially relevant in the 1960s and 1970s, when President Lyndon B. Johnson’s “Great Society” federal programs and President Richard Nixon’s revenue sharing had outsized effects on state and local governments. But in the 1980s, under President Ronald Reagan, the ACIR began to lose steam. It suffered budget cuts, and its board became increasingly partisan. Professional staff members’ political affiliations were evaluated. Its work shifted toward Reagan-esque topics like reduced federal spending and the devolution of federal programs and funds to the state and local levels. That attitude ran counter to the ACIR’s roots, which emphasized the idea of cooperative federalism, as opposed to devolution.

When President Bill Clinton took office, he sought something of a revival for the ACIR, going so far as to meet with commission members in the Executive Office Building in 1993. But the honeymoon didn’t last long. After Republicans took over Congress in 1994, they passed the Unfunded Mandates Reform Act, and ordered the ACIR to study the impact of various mandates on states and localities. But the commission’s draft report, released in January 1996, took a one-sided approach. It focused almost entirely on the dollar cost of mandates, largely ignoring any positive effects they might have. Environmentalists, unions and advocates for the disabled, not known for criticism of the ACIR in past years, loudly decried the study when it was publicly released. The ACIR was unprepared for the blowback and, in an unprecedented move, its commissioners voted to rescind their report. By then, the damage was already done.

At the same time, a culture of aggressive budget cutting had taken over in Congress. Despite its small budget of only about $1 million a year, the ACIR was squarely in the crosshairs. Spotty attendance by the commission’s federal representatives caused many in Congress to view it as little more than a state-and-local advocacy group. With a wonky mission and a long-winded name, the ACIR was an easy target for belt-tighteners. “We weren’t particularly sexy,” says Victor Ashe, who served on the commission during its final years while he was mayor of Knoxville, Tenn. “No one was stopping the presses to print our reports.” There was no political downside to killing the ACIR. Since the commission had already angered interest groups aligned with Democrats, Clinton wasn’t willing to fight for its continued existence. Congress killed the ACIR outright in late 1996.

Even though the ACIR never had a high profile, its absence is significant. While state and local leaders often meet individually with members of Congress, and occasionally obtain access to executive branch leaders through the White House Office of Intergovernmental Affairs, organized dialogues are lacking. “There’s nothing institutionally that brings everyone there at the same time, at the same table, as equals, rather than just being brought in as a photo op,” says Michael Lawson, an ACIR staffer during the 1980s who now teaches at George Mason University.

But the death of the ACIR wasn’t the cause of Washington’s uninterest in intergovernmental relations; rather, it was the symptom. State and local leaders largely saw their power diminish in Washington over the second half of the 20th century because of changes in the way federal lawmakers came to power, says Paul Posner of George Mason University. (Posner and Lawson are both Governing contributors.) Originally, governors, county leaders and mayors were political gatekeepers to those seeking to run for Congress. That meant congressmen, once in power, were somewhat beholden to them. That started to change in the 1960s, and today, federal lawmakers “get on the ballot not by kissing the ring of their state and local leaders but by their own entrepreneurial efforts,” Posner says.

State and local stakeholders have tried to counteract the trend by becoming part of the D.C. lobbying scene, but in the expensive world of Washington influence, they lack the resources to compete against better-funded private interests vying for the attention of federal decisionmakers. Members of the leading state and local government associations grumble that they’re often treated by official Washington like any other self-serving advocacy organization.

Several experts cite the proliferation of private D.C. think tanks, especially partisan ones, which have gradually replaced the ACIR as the exclusive broker of data on state and local finances. Some of those entities have come to have more resources and clout than the ACIR ever did. In short, Posner says, Washington’s attitude toward state and local officials is simple: “relative indifference.”

There are still those who look back fondly on the ACIR, particularly state and local advocates who increasingly gripe about their role in Washington. They wonder whether an ACIR-type organization could ever be revived.

Recreating something like the ACIR would require finding an influential federal advocate, which is a huge hurdle. High-minded panels that examine federalism don’t generate headlines for politicians. In a conversation often cited by those who study the ACIR, Michigan Sen. Carl Levin, at the time an ACIR commissioner, once reportedly told Kincaid, the former director, that “there is no political capital in intergovernmental relations or serving on ACIR.” Nobody currently serving in Congress has made a serious effort to revive the commission, with one exception: Rep. Gerald Connolly, a Democrat representing Washington’s suburbs who previously served as chair of the Fairfax County, Va., Board of Supervisors.

Connolly has been introducing legislation since 2009 that would establish a bipartisan intergovernmental relations commission in the same vein as the ACIR. But it’s barely registered a blip in Congress. His most recent iteration, introduced in February, has a single co-sponsor and was relegated to a committee where it has yet to have a hearing. Organizations that would seemingly be the main beneficiaries aren’t vocal supporters, likely because they’re wary of spending political capital advocating for legislation that probably won’t gain traction (Connolly declined to speak for this story). “It’s probably needed now more than it’s ever been needed,” says Larry Naake, former head of the National Association of Counties (NACo) and a supporter of Connolly’s efforts. “But there’s not the will to do it. Promoting anything that smacks of additional government, at this point, is pretty tough.”

There’s also widespread acknowledgment that any kind of intergovernmental relations panel can only be as successful as its stakeholders -- particularly those from the federal government -- want it to be. Without access to and influence on federal policymakers, a new ACIR could devolve into little more than frustrated state and local leaders talking to themselves. Former Utah Gov. Mike Leavitt, a one-time ACIR commissioner, says that’s what the situation was when he joined the ACIR in 1993. It quickly became clear that “Congress didn’t want to be changed” and the organization wouldn’t have real influence. “Is it a good idea? Yes. But it’s got to have a real role, a serious mandate and the ability to do stuff.”

Indeed, there are some who question whether the ACIR was as important an institution as supporters say. Former staff members acknowledge it’s hard to pinpoint specific laws enacted as a result of the commission’s recommendations. “I don’t remember it being a place where we went to get an agreement that could then be enacted as part of something,” says Ray Scheppach, former executive director of the National Governors Association (NGA). Backers of the commission respond that the critics are thinking of the ACIR during its declining days in the 1980s and 1990s, and ignoring the earlier decades when it was at the peak of its influence.

Ed Rendell, who served on the ACIR while he was mayor of Philadelphia in the 1990s, says its most useful function wasn’t developing concrete policies but instead prompting discussions that led to better understanding of the federal-state-local relationship. He says it served a valuable role as an adviser to Congress, which doesn’t have any other formal vehicle for getting input from states and localities.

Today, however, the more important question is whether Congress would want that input. A serious study of federalism “won’t happen because of a commission,” says Leavitt, who as Utah’s governor devoted serious attention to federal issues. “It will happen because someone stands up and says we’ve got to rethink the role of government.” But others say that government officials -- and not just federal ones -- aren’t interested in high-minded academic research and are skeptical that it would do much to drive policy. While a Democratic lawmaker might appreciate a report from a left-leaning think tank on the merits of Community Development Block Grants, and a Republican might appreciate a study from a right-leaning group on privatization, it’s unclear whether either of them would care a great deal what public administration experts think about the internal workings of the federal system.

Meanwhile, there’s little consensus on exactly how a revived ACIR would be structured, even if it could overcome the odds and get buy-in from the feds. (There does seem to be universal agreement that any proposal to create such a body should avoid the original ACIR’s name, which now carries political baggage.)

NACo and the NGA have separately called for the creation of bodies that sound similar to the ACIR. Rendell says it should be resurrected as an arm of the White House Domestic Policy Council, without any staff, as a low-cost way for the president to have a sounding board on state and local issues. Richard Nathan, a former ACIR commissioner, calls for an entity focused on financial issues -- not advocacy -- that could be located within the nonpartisan Congressional Budget Office. Some advocates say that given the political climate, an ACIR-type entity might do well being housed wholly outside the government, perhaps in a foundation.

On the other hand, several former staffers and commissioners say there’s no point in reviving anything like the ACIR until Washington finds a way to tone down its disruptive partisanship. “I’m not sure how effective it would be unless there was a sea change in attitudes,” Ashe says. Kincaid puts it more bluntly: “The White House isn’t interested, and neither is Congress.”

Bruce Katz, who leads the Brookings Institution’s Metropolitan Policy Program, has a different view. He says Washington doesn’t really see cities and states as partners anymore, and dysfunction in the capital underscores the fact that state and localities -- as opposed to the feds -- will be the government innovators going forward. “These are separate and disjointed areas of government that really have little to do with each other, except in emergencies,” Katz says. He believes the idea of an intergovernmental commission is an outdated concept at a time when Washington has become so unproductive. Given that dynamic, he says, it’s time for cities and states to start making active demands of federal officials -- not figuring out the best ways to advise them. “I think what we need,” Katz says, “is something a lot more aggressive.”

Caroline Cournoyer is GOVERNING's senior web editor.
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