Imbalance of Powers

The feds aren't just handing out money -- they're redistributing clout.
June 2009
Donald F. Kettl
By Donald F. Kettl  |  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

Eighteen-year-old Casey Edwards is no stranger to tough issues. The high school senior from Chapin, South Carolina, sold chicken sandwiches last year to raise money to improve programs in a local school. But this year, she's trying a harder one: She's taking on her governor, Mark Sanford, in an epic battle over whether the state should accept its share of federal stimulus cash.

The money flows when the governor asks for it, and Sanford says he won't apply for $700 million of the cash without an equivalent reduction in the state debt. Edwards thinks that's wrong and fears that the governor's decision would be unfair to needy children.

Sanford counters that South Carolina state government already costs taxpayers 130 percent more than the national average and that the federal cash would only create further bloat. State legislators are on Casey's side, arguing that the governor is holding police officers and teachers hostage. But Sanford insists that "this administration has the sole authority to ask for these funds, not the legislature."

Behind the argument over the money lies a subtle issue with a potentially long shadow. The goal of the stimulus is to pump money out fast to revive the U.S. economy. But the way it's happening threatens to knock state legislators off the front lines in big state policy battles.

In part, this mirrors what's happening in Washington. Once Congress finished the battle over what to put into the stimulus bill, the show moved to the executive branch. It's federal executives who are in charge of writing the guidelines needed to rush the money out the door.

At the national level, the stimulus is bringing a two-step shift in power: from Congress to the executive branch, and within the executive branch from the agencies to the presidency. The Obama White House is breeding czars at a pace that even the old Russian royal family might not have been able to match, and concentrating executive power in a way that Dick Cheney only dreamed of.

Something similar is unfolding in the states. The Obama administration's Web site highlights which states have moved toward transparency by creating their own stimulus Web sites. These sites are invariably executive- branch creations. They give governors a prime opportunity to spotlight their own role in the recovery--and often to minimize the role of the legislature.

The law requires states to get the cash flowing fast. Legislators have their favorite projects, but executive agencies know which shovels can turn the ground fastest. Executive-branch officials keep the catalogs for projects and manage the queues of requests, from new highways and bridges to new college dorms.

Then there are the accountability provisions highlighted in the stimulus. The Obama administration has made transparency the central strategy for minimizing fraud and abuse. If mayors propose wasteful projects, the president said, "I will call them out on it." But it's an open question how well this strategy will work. We've never put so much information on the table in such a short period of time. Some state officials already have started worrying that embarrassing tales are inevitable, and that the search for transparency will quickly become target practice on them.

No matter how much they may worry, one thing is certain: The Web-based transparency strategy favors the executive. It's the executive branch in most states that knows how to pull the information together. Even a casual tour of state stimulus Web sites shows that they are program-based and governor-centered--and that the Web sites for most state legislatures mostly talk about the members and rarely discuss programs at all. The federal transparency initiative creates a game in which lawmakers are at a disadvantage.

The stimulus money will go away in a couple of years. But it's a pretty fair bet that transparency will be one of its long-term legacies. Many in Washington remember the strings-free general revenue sharing program of the 1970s--except that the money wasn't completely without strings. Governments that took it had to audit their books. For thousands of local governments, it was the first audit they had ever done. Even after the money went away, the audits stayed.

Neither Congress nor President Obama nor Casey Edwards had a big power shift in mind. But after the stimulus money evaporates, the power shift is likely to remain, driven by transparency. State legislators can get into the new game, but that will require very un-legislator-like behavior, with a new focus on Web-based oversight. The stimulus cash may well be changing the game faster than the legislatures can adapt to it.