Crazy Quilt Federalism

Innovation is happening in a lot of places, just in different ways.
November 2014
Peter Harkness
By Peter Harkness  |  Founder, Publisher Emeritus

We launched Governing magazine 27 years ago in the belief that most of the innovation and energy in American government, both in policymaking and management, was occurring at the state and local levels, not in Washington.

Just four months before our first issue rolled off the press, John Herbers, a reporter for The New York Times and one of Governing’s first columnists, wrote a long analysis in the Times about how the structure of governance was changing.

“The idea of levels of government -- with the federal government supreme, as it was for half a century -- is fading,” he wrote. The “return to a more federalist system is central to the substantial changes in domestic government under the Reagan administration -- changes that may well be deeper and more permanent than generally acknowledged. At the same time, it is clear that much of the change has no direct connection to policies or leadership from Washington.” What was emerging, he noted, was being called by scholars a “fend-for-yourself” system.

The only part of Herbers’ analysis I would dispute is the Reagan administration reference, because more than a decade before Reagan’s election, President Richard Nixon had proposed a “New Federalism” and passed a revenue-sharing program that lasted 14 years, until Reagan replaced it with block grants in 1987. Nixon’s popular Community Development Block Grant program, though diminished, still exists today.

The Nixon brand of federalism was aimed at making the large central bureaucracies smaller and more efficient. Reagan’s brand was designed to slim down the central government and spend resources more efficiently by funneling them through the states. Most every president since Reagan, with the possible exception of George W. Bush (known for his “shift-and-shaft,” more coercive brand of federalism), basically has favored the power-sharing path with the states and increasingly the localities. It probably didn’t hurt that former governors occupied the White House in 28 of the 32 years from the end of the Nixon/Ford administration to the election of President Obama.

So what kind of federalism do we have today? We know two things: First, the Great Recession gave regions, states and locals a collective body blow from which most have only recently recovered. After all, when state, county and city leaders are making massive cuts in education, health care and infrastructure, it’s harder to be innovative. Second, Washington has reached a level of dysfunction that would have seemed almost unimaginable not that long ago.

So for lack of a better slogan, I nominate “crazy quilt federalism” as the best descriptor of what we are seeing today. Though there is more uniformity in what local governments are doing, that is not true for the states. How you define innovation very much depends on your ideology -- a disease that has escaped the Capital Beltway to state capitols around the country.

Just look at health care. Roughly half the states have to some degree accepted the Affordable Care Act and expanded Medicaid, meaning that the 45 million uninsured citizens are increasingly concentrated in those states that have not. Pennsylvania was the latest to sign on in August, and it appears that another five or six will soon do the same, with negotiated modifications to appease conservatives. Another nine states have joined a proposed interstate Health Care Compact that would allow them to use federal block grants to design and operate their own health-care programs.

On education, there is general agreement that the existing federal education statute, No Child Left Behind, needs a major overhaul. In the words of Education Secretary Arne Duncan, the program “created an artificial goal of proficiency that encouraged states to set low standards to make it easier for students to reach the goal.”

Reformers had thought they were on the right track with the adoption of the Common Core State Standards developed by governors and their education directors. Originally adopted by 46 states, support in both legislatures and the public has eroded significantly. Legislatures in at least a dozen states have inserted themselves into the process of setting standards, much to the horror of the National School Boards Association.

Some of this smacks of politics: Louisiana Gov. Bobby Jindal unsuccessfully tried to withdraw his state from the Common Core even though he had been an avid supporter.

Then there is environmental regulation, particularly as it relates to the politically toxic issue of climate change. The contrast between those states and localities that are opposed to taking action and those that are sprinting well ahead of the feds in plans for cutting carbon emissions is perhaps the most pronounced of any issue.

In these and a number of other policy areas, though, it would be a mistake to think that state and local innovation can be viewed solely through a blue versus red prism. Progress is being made in a lot of places one might not have predicted, just in different ways. That’s the crazy quilt of state and local governance.

Peter Harkness
Peter Harkness | Founder, Publisher Emeritus |