Publius: The Journal of Federalism Advance Access published online on May 23, 2007
Publius: The Journal of Federalism, doi:10.1093/publius/pjm014
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The Politics of Coercive Federalism in the Bush Era
*George Mason University
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Abstract
Coercive Federalism: A TaxonomyDuring the period of the Bush Presidency, the federal government proceeded to centralize and nationalize policy in major areas formerly controlled by states and localities. The extension of federal goals and standards to such areas as education testing, sales tax collection, emergency management, infrastructure, and elections administration were among the areas of significant mandates and preemptions. The continuation of policy centralization in areas under a conservative and unified political regime shows how strong and deep the roots are for centralizing policy actions in our intergovernmental system.
Over the past forty years, mandates and preemptions have become among the primary tools relied on by Congress and the president to project national priorities and objectives throughout the intergovernmental system (Kincaid 1990
). The trends toward the use of coercive tools have proven to be durable and long lasting, albeit punctuated by episodes of reform. While the enactment of unfunded mandates reform in 1995 most certainly has led to some restraint, the underlying forces prompting national leaders to use these tools have proven to be persistent and compelling. The secular trends toward a more coercive and centralized federalism have survived the passage of both Republican and Democratic Administrations, as well as Democratic and Republican Congresses (Posner 1998).
The beginning of the twenty-first century witnessed the marshalling of new political forces that might be expected to turn away from the instruments of coercive federalism. The ascendancy of George W. Bush to the presidency, in concert with a remarkably unified Republican control of the Congress, presaged a period of unified government presided over by unprecedented conservative political leadership not seen since before the Great Depression. Coupled with the earlier passage of Unfunded Mandate Reform Act as one of the first acts of the 1995 conservative Republican Congress, hopes for the arrest and even reversal of federal policy centralization ran high in many quarters.
This article will explore whether the ascendance of the conservative regime in the White House and the Congress, coming on the heels of the unfunded mandates reform, made a significant difference in reversing the trends toward coercive federalism characterizing previous administrations and congresses. It will first offer a taxonomy for coercive federalism and discuss the kinds of intergovernmental regulations that are covered by the term. The trends under the Bush presidency will be addressed by discussing significant federal actions adopted and their potential regulatory impact on state and local governments. The political sources of these trends will be explored and compared with the roots of coercive federalism from prior eras. The final section discusses variables which give rise to mandates and other forms of coercive federalism at the federal level. In short, are there discrete factors that help explain the proclivity of national leaders to adopt mandates compared with other forms of national policy leadership?
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Coercive Federalism: A Taxonomy |
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The concept of coercive federalism covers a range of potential federal policy actions with centralizing effects on our system. Intergovernmental regulations can range from direct orders imposed on state and local governments by federal statute to more indirect actions that force state and local policy change as a consequence of other independent federal policies, such as the implications of federal immigration policies for local health clinics. The Advisory Commission on Intergovernmental Relations usefully defined a taxonomy of "federally induced costs" which suggested discrete policy actions the federal government can take to increase state and local costs (ACIR 1994
): - Statutory direct order mandates
- Grant conditions, both program specific and crosscutting
- Total statutory preemption
- Partial statutory preemption
- Federal income tax provisions affecting state and local tax bases
- Regulatory actions taken by federal courts and agencies
- Regulatory delays and nonenforcement
- Federal exposure of state and local governments to liability lawsuits
Given the range of potential actions covered under the rubric of coercive federalism, national actions can be best characterized along a continuum of centralization and fiscal impact that goes well beyond the popular concept of "unfunded mandates." Coercive federal actions in fact span a wide range of tools that also at times include classic elements of cooperative federalism as well, such as the presence of federal grant funding covering some of the costs. The Unfunded Mandates Reform Act (UMRA) of 1995 primarily addressed only one of the instruments of coercive federalism—statutory direct orders—and this relatively narrow definition has served to limit not only our understanding of the implications of national policy decisions for our federal system but also has served to limit the potential effectiveness of this reform in influencing these policy decisions.
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The Bush Era: Continuities and Change |
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At the outset of a new administration, expectations were high for policy change in the intergovernmental system. President Bush himself proved to be more committed to conservative ideological principles than many had expected, given his self proclaimed profile as a consensus leader with Democratic state legislators in Texas (Fortier and Ornstein 2003
). The president was able to work with Republican majorities in both House and Senate, albeit with a brief period of Democratic Senate control owing to Vermont Senator Jeffords’s conversion from a Republican to an Independent. The Republicans controlling the Congress were far more conservative than previous Republican regimes in the Congress. Moreover, the Congress had passed the Unfunded Mandates Act of 1995 which reflected a bipartisan commitment to curb the use of mandates.
Notwithstanding these forces, the period of the Bush presidency in fact witnessed the continuation of the centralization and nationalization of priorities and policies that had characterized previous administrations, both Republican and Democratic. As with those earlier administrations, federalism issues were largely relegated to secondary consideration, often trumped by more compelling national issues and values. It is true that the Bush administration did propose a modicum of decentralization through grant consolidations of community development, state control of the Head Start program, superwaiver proposals1, and providing greater state flexibility under Medicaid, albeit accompanied by new funding caps. (Finegold, Wheary, and Schardin 2004). However, the administration put very little "capital" into these initiatives, backing away from these proposals when the going got rough in the Congress. Rather the administration and a Republican Congress defined themselves by major new domestic policy initiatives that constituted major policy departures and federal role expansions. Significant nationalization and centralization of policy occurred in five major areas, many traditionally controlled by state and local governments: education, welfare, homeland security, election administration, and taxation. While many of these actions are covered elsewhere in this volume, it is useful to discuss these decisions along the continuum of coercive federalism.
Education
Perhaps no area has been as sacred to our tradition of federalism and local governance as local control of schools. Given this backdrop, passage of No Child Left Behind (NCLB) with the leadership of President Bush marked a major turning point in the centralization of our federal system. While Democratic support for a stronger federal role was to be expected, the strong leadership of President Bush for federal testing and accountability standards was not only a surprise, but also a reversal of the Republican Congress’ position only five years earlier calling for the abolition of the Department of Education. Indeed, Bush lobbied to eliminate the language calling for the department's abolition from the Republican platform in 2002 (Rudalevige 2003). The president's embrace of a strong federal role in education was anything but idiosyncratic, and in fact followed a growing trend in both presidential leadership and public opinion supporting a stronger federal role in education. Following the 1996 presidential election, Republican elites came to realize that defining themselves as the party whose presidential standard bearer carried the tenth amendment in his shirt pocket and whose congressional leaders sought to turn educational leadership back to states and localities was a losing position (Manna 2006).
Skirting the Unfunded Mandates Act, NCLB's requirements were couched as conditions of federal assistance, a category that exempted it from the law's point of order provision.2 The new mandates were broad reaching indeed, as the testing, teaching, and accountability requirements established a daunting new framework for local education policy and practice. Significant concessions were in fact made to the state and local governments as well. States could define the standards used for tests, parents were consigned to find alternatives for failing schools only among other public schools within the school district, and federal funding rose significantly in the years following passage.3
The years of cooperative federalism characterizing the prior period of federal education had succeeded in both promoting greater state and local dependence on ESEA funds as well as gaining state and local buy-in for federal educational policy goals (Peterson, Rabe, and Wong 1986). Indeed, the governors led a coalition of business leaders and others calling for stronger national education standards as early as the 1990 Charlottesville summit with President George H.W. Bush. As the new law was implemented and the costs became more salient during the past five years, however, many state and local officials came to denounce the law as embodying over prescriptive mandates imposed without sufficient funding, and bargaining has ensued in a familiar intergovernmental story line. (Ingram 1977).
Welfare Reform
The passage of welfare reform in 1996 marked a signal shift in federal social welfare policy. Converting an open-ended federal grant program into a block grant to the states (called the Temporary Assistance for Needy Families or TANF), the act devolved significant authority to the states to define eligibility and to use funds for a wide range of activities related to supporting lower income persons. While states gained significant authority, the 1996 act did contain major federal mandates, foisting new federal time limits and work participation requirements on states and their welfare recipients. As Jocelyn Johnston notes, the devolutionary rhetoric around the law reduced attention to the stiff requirements imposed (Johnston 2007). At the time of its passage, most states were governed by Republican governors whose policies were congruent with the regulations implicit in the new law.
While popularly celebrated as a triumph of state innovation, in fact the Republicans in the White House and the Congress watched the states as carefully as Democratic committee chairs watched the states during the Reagan block grants of the 1980s. They were concerned that states were undermining the Republican ideological agenda by sidestepping the spirit of the program's work requirements. Under the 1996 act, in fact, states were able to count toward the program's work requirements caseload reductions occurring due to the economy and the program definitions. Twenty states were able to avoid placing additional welfare recipients in work, thanks to this caseload reduction credit. States also shifted the most difficult to place clients to state funding lines, thereby avoiding the work strictures applying to clients served under the federal block grant itself. Finally, reports of states’ diversion of block grant funds for other purposes through fiscal substitution inspired concerns by congressional Republicans that states were not faithful partners under the TANF welfare reform process.
The 2006 reauthorization significantly increased the strength of the work mandates associated with the program. The work participation requirements were increased, with the caseload reduction credit no longer available to offset the states’ compliance obligations. Moreover, the definition of work activities has narrowed, curtailing the time allowed for education or training to count toward the work requirement. States in compliance under the old rules suddenly find themselves facing the burden of increasing their welfare clients’ work participation by more than 100 percent. The challenge is complicated by the fact that those remaining on the rolls following the drop in caseloads across the nation are the most difficult to place in jobs. The new requirement for 90 percent of two-parent families to work a minimum of thirty-five hours a week is acknowledged to be "pretty much unattainable" by Wade Horn, the assistant secretary in the Department of Health and Human Services responsible for the program (Perlman 2006). As with prior re-categorizations of block grants, Congress also made significant changes in reporting and oversight over the states, including extending new requirements to cases funded entirely from state dollars.
Election Administration
The Florida election crisis in 2000 clouded the results of the presidential election, precipitating a crisis of legitimacy in our political system. The fallout included congressional action to reform the process of elections administration at the state and local level, culminating in passage of the 2002 Help America Vote Act (HAVA). The act instituted sweeping new federal standards, along with new funding, that regulated significant features of state and local election processes. Congress also provided $3 billion in funding for state and local costs, primarily associated with modernization of election machines, albeit still falling short of actual costs incurred by nearly $800 million (Congressional Research Service 2004).
The HAVA instituted new direct order federal mandates requiring new voting systems, provisional ballots, statewide voter databases, and access to polling places for disabled persons. Federal error rate standards must be met, and voters must be allowed to correct errors. Importantly, the law requires the centralization of the registration and elections process at the state level, specifying new requirements for statewide voter databases and uniform processes for vote definitions across the state (Liebschutz and Palazzolo 2005).
HAVA was passed through co-partisan negotiations between House Republicans and Senate Democrats at a time when the Senate was controlled by Democrats. The 2000 election prompted a veritable stampede toward federal action, as both parties realized that the failure to act on what was perceived to be a national crisis could constitute a liability for their party. In this sense, election reform became a valence issue, where federal standards became the only legitimate position that could be taken publicly by political leaders. Conservative Republicans controlling the House, led by Rep. Robert Ney (R-OH), chair of the House Administration Committee, were "reluctant mandators," pulled from their conservative moorings and reservations about the federal role by the nationalization of this issue as an unassailable cause. While recognizing they had little choice but to pass legislation, House members succeeded in embodying a devolutionary strategy for implementation, where principal responsibility for defining the statute and making key decisions rested with the states. Consequently, when faced with determining how to define such requirements as provisional voting, states have been on their own to adopt widely differing interpretations, with some counting such ballots only if counted in the voter's home precinct, while others having a broader interpretation.
Tax Policy
Changes in tax policy over the Bush years have had significant, albeit often indirect, consequences on state tax policies and administration. While not mandates in the classic sense and not covered under UMRA, the tax cuts of 2001 and 2003—central to the Bush economic agenda—constituted unilateral federal policy changes to federal-state shared tax bases that threatened to unravel a system of cooperative tax policy and administration that had evolved over many years. While cuts to individual and capital gains tax rates themselves do not threaten the tax bases of states, major changes in depreciation, dividends, and estate taxes presented states with a significant erosion of their income tax bases. Such changes force states to acquiesce and accept their consequences or decouple from the federal tax base. Decoupling complicates the overall system, inhibits sharing of data facilitating tax administration with IRS and adds to the burdens facing taxpayers.
In some respects, unilateral changes to federal income tax bases were a continuation of trends from prior presidential eras. However, tax policy actions broke new ground in some areas. In the estate tax area, an historic agreement was ignored and set aside. The estate tax, originally a state tax, became a shared federal-state regime in 1924, when the federal law was amended to allow a federal tax credit for any estate taxes due under state law (the credit was capped). In this case federal policy makers were intent on providing incentives for states to continue their own estate taxes, rather than displace them by a new federal tax regime. Under the 2001 legislation, the federal estate tax is phased out through 2010 by gradually raising the threshold that triggers the tax (the tax is then reinstated in 2011, but the state credit is not, unless Congress acts). With state revenue losses estimated at as much as $9 billion annually, 20 states have decided to decouple from the federal estate tax laws, complicating tax planning and tax administration.
Moreover, the pace of federal preemptions of state and local tax law has accelerated in recent years. As early as 1985, the Congress acted to prohibit states from imposing business taxes on out-of-state companies with limited nexus in 1985 (PL-86-272). This was reinforced by Supreme Court decisions which prevented states from collecting sales taxes on the sales of goods produced by remote sellers, although the Court left the door open for Congress to overturn this preemption by statute.4 Congress has not acted on this invitation to enable states to extend their sales tax to mobile sales, notwithstanding the fact that remote sales have grown to constitute a greater share of economic activity. The efforts by a majority of states to adopt a more uniform sales tax base through the Streamlined Sales Tax Project have yet to be rewarded with congressional recognition.5 Congressional preemptions of state taxation proceeded further than the Court's ruling. In 2004, Congress extended the preemption of state authority to tax Internet access, an action that will reduce state and local revenues by at least $300 million according to the Congressional Budget Office.
A recent forum of high level federal, state, and local officials convened by the National Academy of Public Administration concluded that unilateral federal tax policy actions such as these has rendered the tax system less cooperative in recent years, prompting shortfalls in revenues for government programs and greater complexity for individual and business taxpayers. The forum concluded that intergovernmental conflict and tension threaten to undermine the state and local revenue bases that are the underpinning for their roles in the economy, in their communities, and in these federal programs (NAPA 2006).
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Homeland Security |
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The tragic events of September 11, 2001, forced federal officials to recognize that the intergovernmental system constituted the nation's first line of defense in dealing with the consequences of terrorist attacks. However, the presence of a strong national consensus, many externalities, extensive interdependencies, and high stakes ultimately led the administration and the Congress to adopt intergovernmental grants and mandates that, together, served to centralize emergency preparedness, infrastructure and other state and local services. Many would argue that this is indeed a necessary and appropriate response to a truly national crisis. For instance, the failure of even one state to observe standards for issuance of driver's licenses could compromise the efforts of the other states to provide a more secure identification card. War has been noted to centralize power in our nation before.
Beyond the apparent functional arguments, the politics of homeland security also promote policy centralization. Political leaders at all levels realize they are uniquely accountable should an incident occur on "their watch." The uniquely high political stakes motivate national as well as state and local leaders to insulate themselves from blame for future incidents through higher spending and through the development of regulatory standards that can be argued to protect both against future attacks and future political opponents alike (Posner 2003). State and local officials have embraced national standards to protect themselves from potential collective action problems associated with intergovernmental competition (Keleman 1999). National standards and guidance not only put a floor under competition with other jurisdictions; they also provide internal political cover to address internal political opposition and to answer the most sensitive of political questions raised by homeland security for any political leader—how much preparedness is enough?
The president issued a directive in 2003 requiring the Department of Homeland Security (DHS) to establish national standards for emergency preparedness, governing such areas as equipment, training, exercises and planning assisted with federal funds.6 The DHS responded by developing a set of guidance documents setting forth standards or "target capabilities" for thirty-six areas of emergency planning and response, keyed to fifteen types of emergencies. The standards were based on a national DHS analysis of nearly four thousand discrete "tasks" involved in responding to these types of disasters. For instance, for pandemic flu, the standards or target capabilities for pandemic flu include how state and local governments are positioned to perform terrorism investigation, mass prophylaxis, and community recovery.
The standards are sweeping in their coverage, fortified by performance measures to specify desired levels of performance by state and local governments. For instance, state and local governments are required to comply with the National Incident Management System to structure their response operations, obligating them to change long standing routines such as eliminating the use of "10" codes for communicating among first responders, choosing "plain English" terms instead (Fiorill 2005).
Mass transit and driver's license security are two areas where state and local officials have embraced some form of federal standards. In mass transit, proposed Transportation Security Administration guidance addresses such issues as the design and engineering for facilities and vehicles, emergency operations for staff, screening and training for operators, mutual aid policies, and planning processes. Local transit agencies themselves have asked for guidance to obtain federal definitions of the appropriate levels of security they should maintain. For instance, some would like to know if they need to post guards all the time at tunnel entrances—federal guidance would help indemnify them from potential lawsuits and public blame (GAO 2002).
Federal standards to promote a secure driver's license were recommended by the state motor vehicles administrators themselves, as a way to force recalcitrant states to adopt uniform procedures that they have failed to do under voluntary compacts.7 In the "be careful what you ask for" category, Congress responded with passage of legislation ultimately going well beyond the suggestions made by the states. Initial legislation enacting federal standards was passed in 2004, partly in response to recommendations issued by the 9–11 commission.8 The 2004 legislation removed harsher mandates proposed by Rep. James Sensenbrenner (R-OH), chair of the House Judiciary Committee, and contained significant concessions to the states such as providing for negotiated rulemaking with states and applying the standards only to new licenses. A cagy conservative policy entrepreneur, Sensenbrenner persisted and, with support from the Bush administration, succeeded in passing a stronger measure—the Real ID Act—as part of "must sign" legislation funding U.S. troops in Iraq and Afghanistan. (PL109-13). In addition to a stronger mandate, Sensenbrenner and his coalition succeeded in including provisions prohibiting states from issuing federally approved ID's to illegal aliens, currently the practice in ten states.
The Real ID Act establishes federal standards for state driver's licenses that must be met by May 2008, although the administration has provided additional time for implementation. While technically not a "direct order" mandate, the effect is the same, as residents of states lacking this new secure ID would not be able to board airplanes. State associations estimate the costs to exceed $11 billion over five years, with little funding coming from the federal government (National Governors Association 2006). The most burdensome provisions include reenrollment of all current license holders, new verification processes with original documentation such as birth certificates, and new tamper-proof security features for the card itself.
Other Mandates
The 109th Congress offers a window in to other mandates that have recently been imposed on the state and local sector:9
- A requirement for states to collect data on sex offenders including DNA samples and to prepare a statewide sex offender registry database (PL109-299), as a condition attached to receipt of federal law enforcement grants. No appropriations have yet been provided to cover what CBO estimates to be costs of $60 million over a five-year period.
- Prohibition against using federal grant funds for projects where eminent domain is employed to support private use, a response to the Supreme Court's decision in the Kelo case where the use of eminent domain for such purposes was ruled constitutional.10 The provision was contained in an FY 2006 appropriations act (PL 109-115).11
- Federal standards requiring state and local governments using federal foster care funds to visit foster care children monthly (PL 109-299).
- Prohibition of state and local lawsuits against manufacturers or sellers of firearms (PL 109-92).
- Institution of a requirement for states to hold special elections when continuity of government is jeopardized by a national emergency, necessitating some states to amend their constitutions (PL 109-55).
- Preemption of state authority governing citing of certain transmission lines, and citing and operation of onshore liquefied natural gas facilities, energy efficiency, safety of nuclear facilities, and the reliability of electric services (PL 109-58).
This litany of enacted mandates should not obscure some of the notable concessions achieved by state and local governments. Of most fiscal importance, the states succeeded in derailing the administration's proposals to close-end the Medicaid program. In various formulations, this took the guise of a block grant and an entitlement with fiscal limits, all of which inspired intense lobbying by the governors and other state officials who succeeded in defeating these proposals in the Congress. State and local officials also achieved a significant victory in forestalling a House-passed provision in the energy bill of 2005 (HR 6) protecting producers of the gasoline additive methyl tertiary butyl ether (MTBE) from suits by local governments recovering damages from groundwater pollution. The liability waiver was strongly promoted by House Majority Leader Tom DeLay (R-TX) but opposed by a wide range of environmental groups. The impact on local government cleanup costs was a significant part of the debate, which was fueled by a CBO cost estimate revealing that projected state and local costs would exceed the threshold needed to raise a point of order against the legislation (Congressional Budget Office 2005).
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The Evolution of Mandates as a Tool of Government |
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The mandates passed during this period illustrated both continuity and change in the types of policy instruments adopted by federal policymakers to impose national regulatory policies. Congress and the president showed themselves to be opportunistic in reaching for a wide range of regulatory strategies to impose mandated requirements on state and local governments. Direct orders, although not a major instrument of federal policy implementation, were used in the case of election administration, as states were mandated to institute provisional voting and centralize election administration through such actions as statewide registration lists. Grant conditions—the predominant federal strategy used to impose national rules—continued to be a vital strategy, with NCLB which required states to adopt a federal accountability regime as a condition for receiving Title I, ESEA funds.
Crossover sanctions—where regulatory policies are implemented by threatening the loss of other federal funds or privileges—were used in the Real ID Act where states’ decisions to opt out of national drivers licensure standards would trigger the loss of their residents access to airline travel which will heretofore require presentation of a "secure" driver's license. Total preemptions were used in the Internet tax and energy arenas where states’ authority to tax access to the Internet and to site energy facilities were undermined by new federal legislation.
These traditional regulatory tools were consistent with previous intergovernmental regulations during the prior thirty years. However, the past six years saw some newer policy instruments gain traction and become more important influences on intergovernmental policy and management. These include revenue nationalization, public disclosure, and performance models.
Revenue Nationalization
The Bush era constituted a marked shift toward the erosion of cooperative federalism and federal forbearance in the area of tax policy. The unwinding of the framework for the estate tax and the preemption of state tax bases both portend a new front in coercive federalism that could erode the fiscal wherewithal of states and localities to fulfill their expansive roles in a more coercive federal system. At the very least, such initiatives will increasingly put state and local officials on the defensive, forced to justify decisions to continue to rely on tax bases abandoned by federal officials or to seek new revenues when preempted from existing tax sources. Intergovernmental tax competition may very well intensify in coming years, as federal policymakers facing burgeoning deficits from the baby boom retirement eye states’ command of consumption taxation (NAPA 2006).
Public Disclosure
Federal policies have resorted to the public information tool as a seemingly inexpensive strategy to "shame" regulated entities, whether they be private businesses or state and local governments, to adopt widely shared federal policy goals (Weiss 2002). In the Bush era, such strategies were pursued to provide various publics in the state and local sector with leverage in negotiating policy changes consistent with federal goals. Some analysts have concluded that NCLB will succeed in generating change not through the regulatory "front door" of administrative rulemaking and oversight but rather through the publication of school performance data for all parents to see. Armed with new information on how their schools stack up against standards, parents may very well use this information not only to fortify their "voice" in school decision making but also to inform their decision to possibly "exit" from their community should scores be better in neighboring school districts.
Performance Models
While federal agencies have been required to prepare performance plans and metrics for the past twelve years, agencies have been slow to apply these metrics to grants and other intergovernmental mechanisms. However, such measures became increasingly central approaches for building pressure on state and local governments to support federal program goals. Both welfare reform and NCLB illustrate how states or local government providers are increasingly held accountable for performance outcomes experienced by clients in federal programs (Radin 2006). When they are articulated in national legislation and administrative rules, such measures can have a profoundly centralizing impact on intergovernmental programs.
Notwithstanding the relatively minor fiscal role played by many programs when compared to state and local investments, the assertion of national performance metrics enables federal officials to achieve new influence over the entire intergovernmental service area. Thus, while the federal government contributes only 8 per cent to elementary and secondary education, NCLB articulates performance metrics that go to the heart of curriculum and teaching throughout the nation. The well known proclivity of managers to work to measures is accentuated when the federally prescribed metrics become transformed from merely hortatory goal statements to threshold levels which can trigger changes in funding or service provision. Thus, the newly restrictive welfare job placement mandates will indeed trigger the loss of a portion of TANF funds should states fail to meet the targets. Under NCLB, "performance metrics with consequences" has been taken to a new level, as the schools’ performance shortfalls are automatically linked to such actions as enabling parents to transfer children to other schools and takeover by the state.
All told, these innovations show that this Administration and the Congress have not been content to "take states as they found them." Rather they have developed tools to challenge state and local leaders and managers by putting public officials on the defensive through new metrics and accountability strategies. Energizing new publics and new providers to vie for at least a share of public service provision under federal programs is a vital part of this strategy to deconstruct public authority within the state and local sector. The administration's faith-based initiative is an example where national officials have intentionally attempted to shift in-state provider networks to embolden groups who might be expected to offer competing visions for public service provision to existing public bureaucracies. Although not always successful, the administration's effort to empower clients to choose providers under vouchers and to encourage contracting out of social services are other important examples where centralizing federal policy tools are being deployed to reconstruct public administration in state and local governments.
Impact of the Unfunded Mandate Reform Act of 1995
It is notable that these significant federal policy centralization actions occurred in spite of the existence of the UMRA. Passage of this Act was made possible by unified state and local lobbying and was seized upon by a new Republican Congress as one of the first planks of its Contract With America. The reform was greeted with high hopes by those who expected it to signal the dawn of enlightened intergovernmental cooperation and policymaking.
UMRA established a new regime for Congress and the Executive as it considers legislation defined as unfunded mandates by the law. It strengthened requirements for CBO to estimate state and local cost and private sector impacts of legislation reported by committees, and it provided a point of order for those intergovernmental mandates exceeding a defined cost threshold or lacking a CBO estimate. The theory was that the point of order would serve as a vehicle for those concerned about proposed mandates to force members to vote separately on the desirability of using a mandate to carry out the goals of the underlying legislation. As such, it was not an impenetrable barrier, but more of a "speed bump" that could be promote accountability which could potentially embarrass mandate proponents and rally opponents. The unfunded mandate point of order joined a long list of points of order that have been incorporated into the rules of the Congress to regulate floor debate and actions on issues ranging from the enforcement of federal budgetary constraints to the prohibition of nongermane amendments.
The actual effect of points of order on congressional behavior can be achieved through several pathways. The first involves the actual raising of points of order by members to stop mandates in their legislative tracks. This pathway has not been particularly productive from the state and local standpoint. A GAO report found that as of March, 2004, thirteen points of order had been raised in the House and none in the Senate since the passage of UMRA and the point of order was sustained only one time, on a 1996 minimum wage vote. (GAO 2004). The second pathway is where the CBO cost estimate and the potential for a point of order work as a deterrent to prompt mandate advocates to temper or withdraw their proposals. This certainly has worked in recent years in several notable occasions. For instance, legislation reported out of the House Ways and Means Committee would have narrowed the authority of states to impose taxes on businesses that lacked physical nexus in their states (HR 1956, Business Activity Tax Simplification Act). When CBO estimated annual revenue costs exceeding $3 billion over time, the leadership of the House was persuaded to pull the bill from the calendar (Congressional Budget Office 2006). However, this worked only as part of an effective state and local lobbying campaign that adroitly used the CBO estimate to sidetrack the proposed tax preemption.
Notwithstanding this example, the major mandates discussed earlier proceeded in spite of UMRA's web of procedures and information. One obvious reason is that UMRA's coverage is limited, exempting many of the mandates passed in the past five years. Specifically, UMRA primarily covers only statutory direct orders, excluding most grant conditions and preemptions whose fiscal effects fall below the threshold. Statutory direct orders dealing with constitutional rights, prohibition of discrimination, national security, and Social Security are among those excluded from coverage. Moreover, the analytic and procedure requirements do not apply to appropriations bills, floor amendments or conference reports—those tools of "unorthodox lawmaking" that have become increasingly prevalent in the Congress (Sinclair 2000). Among the major mandates discussed here, the education, homeland security grant conditions, tax base decoupling, elections reform, and welfare reform are among the actions that arguably are not covered by UMRA.
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The Politics of Coercive Federalism |
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Clearly UMRA was not able to provide the institutional ballast to prevent major surges of nationalizing legislation. The roots of federal mandate and preemptions run deep through the modern political system, and it is unrealistic to expect a procedure to forestall strongly rooted national policy movements involving the intergovernmental system. Indeed, the enactment of UMRA reflected a recognition that the systemic political factors previously serving to institutionalize restraint on the exercise of federal regulatory power over states and localities had become eclipsed by secular shifts in political incentives and national policy making processes.
National elected officials have converted from being ambassadors of state and local party leaders to independent political entrepreneurs anxious to establish their own visible policy profiles to appeal to a diverse coalition of interest groups, media, and an increasingly independent base of voters. These trends toward congressional and presidential policy activism span partisan boundaries, obscuring differences on federal role questions that used to define our party system. The relatively recent shift of business groups from allies of the states to advocates of national regulation further underscored the nationalization of the policy agenda in the American system, reflecting in good measure the policy implications of a more globalized economy.
The politics of mandates passed in recent years followed familiar patterns associated with enactment of mandates in earlier decades (Posner 1998). Shifting alliances continue to embrace mandates and preemptions as tools to satisfy a wide range of emerging goals placed on the federal doorstep in a national media culture. The major mandates passed during the Bush era reflected partisan, valence, and interest group driven political pathways.
- Partisan—some of the most contentious mandates reflected the pursuit of highly partisan agendas. The tax cut agenda of 2001 as well as the welfare reform reauthorization of 2006 were driven by deep seated partisan goals pursued by the Bush administration and conservative Republican leaders in the Congress. In at least these cases, strong ideologically based partisan goals trumped any residual support by these party leaders for federalism values. As previous decades have illustrated, the relegation of federalism to a secondary value is itself a nonpartisan phenomenon, reflected by Democrats for certain mandates in health, labor and environmental areas and by Republicans for business preemption, tax policy and moral policy goals.
- Valence—some of the most important mandates passed during the Bush era transcended partisan differences and were embraced by broad coalitions that were either truly bipartisan or at least cross-partisan. In these cases, mandates were framed in symbolic and even moral terms that compelled broad support and made opposition politically untenable. Thus, mandated reforms to state and local elections processes enacted under HAVA were broadly supported by Republican and Democratic leaders alike in the Congress, fearful that they might be blamed for another electoral debacle on their watch. Homeland security could be placed in this category as well—the perception of crisis prompted leaders of both parties to embrace mandates to protect the very homeland of the nation against potential terrorist attack. Finally, passage of NCLB was achieved through a broad cross-partisan coalition, as both parties saw significant advantage in championing this new mandate, and perceived significant political disadvantages if identified as an opponent of such a compelling national goal.
- Interest groups—Mandates were often promoted by powerful interest groups in alliance with key congressional and executive political entrepreneurs. Preemptions of states’ taxation of sales over the Internet, for instance, was spearheaded by a broad business coalition of telecommunications and Internet based firms who saw an opportunity to throw off the yoke of differing state and local taxation regimes. They were supported by congressional entrepreneurs of both parties, such as Sen. Ron Wyden (R-OR) and Sen.George Allen (R-VA) who represent states whose economies had strong Internet companies.
The Ambivalence of State and Local Governments
While powerful national forces are at work, the positioning and cohesion of state and local governments play a pivotal, if not surprising, role in the politics of federal mandates. One might expect states to forcefully argue for their views as powerful interest groups represented in Washington. However, state leaders are often neutralized and even champion particular mandates and preemptions.
First, state and local groups are often disarmed by their lack of political cohesion on key policy issues; lacking agreement they are often unable to articulate positions in national debates (Haider 1974). Second, as political leaders, they are often swept away by the compelling political appeal of major federal mandates and preemptions, whether they be elections reform, education standards or homeland security requirements. Indeed, when examining the major mandates enacted in the past five years, governors and other state executive officials provided active national policy leadership. Many originate from innovations piloted by state officials themselves. For instance, NCLB marks the culmination of a gubernatorial initiated conference on education reform in 1989, followed by formation of the National Education Goals Panel, a state-oriented commission that sustained support for national reforms for more than a decade.
Third, state leaders have come to endorse certain preemptions and mandates to address collective action problems stemming from intergovernmental competition that can undermine states’ incentives to assume policy leadership in key areas. Governors and other state leaders have become supporters of mandates to put a floor under competition from other states that can undermine their policy initiatives. The Real ID Act, which has drawn the ire of state and local officials for its regulatory intrusiveness and high costs, was borne from a voluntary national standards setting initiative undertaken by state motor vehicle administrators in the prior decade, recognizing that the absence of harmony among state license procedures made the entire system vulnerable to security threats. Ironically, such voluntary national standard initiatives are vulnerable to capture by federal policy officials anxious to respond to national problems and eager to legitimize the solution as a state-based approach. In recent years, progressive or advanced states have come to champion partial preemptions which place a floor on competition among states while allowing advanced states to maintain their policy initiatives (Keleman 1999).
This is not to say that states and localities are without influence in the politics of mandating. As key interest groups, they can have an impact when taking cohesive positions and mobilizing their memberships to advance their interests. However, given the substantial ambivalence of state and local officials toward the goals promoted by mandates, I have argued elsewhere that state and local governments achieve their political impact less in the debate over whether to mandate and more in the debate over how to mandate (Posner 1998). Indeed, when looking at such mandates as NCLB and HAVA, states did gain substantial new federal funds for implementing these complex initiatives, and significant regulatory concessions as well. This is partly due to the relative ease through which state and local governments can agree on the means rather than the ends of mandated programs, as well as the desire of many in Congress to mollify opponents to facilitate passage. Perhaps more fundamentally, state and local governments gain bargaining leverage when considering implementation issues because the federal government critically relies on them to achieve its policy goals. The implementation literature has long noted that intergovernmental relations during implementation is characterized more by bargaining than by top-down fiat (Ingram 1977).
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Toward an Analytic Framework |
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State and local governments are critical to the outcomes of mandate policy debates. Given the importance of state and local behavior and the ambivalence that they face in confronting mandate proposals, under what conditions are state and local officials likely to be more or less influential? William Gormley argues that mandates have variable levels of intergovernmental conflict, based in part on the magnitude of federal financial support and the range and extent of federal mandates covering particular areas (Gormley 2006
). We are in need of systematic research addressing this important issue. Several major variables have primary influence in determining mandate policy outcomes, reflecting the positions and incentives of federal, state and local and other political allies as they affect mandates. I have listed the variables below along with suggested hypotheses linking them to the potential for national policy centralization.
- State political cohesion—federal mandates and other forms of policy centralization will tend to increase if state and local governments are neither united nor effectively mobilized to protect their interests.
- Federal political cohesion—federal mandates will tend to increase to the extent that relevant federal officials are unified and mobilized to advance new national goals.
- Federal-state policy congruence—federal mandates will tend to increase to the extent that leading federal and state leaders are in agreement about the substantive goals behind the mandate.
- Alliances—federal mandates will increase to the extent that state and local governments do not enjoy the support of politically influential interest group or partisan allies.
The implications of these relationships are far reaching and in need of further testing. The framework is intended to spark discussion and lead to a contingent theory of the politics of coercive federalism which incorporates the richness of our federal system while leading to general testable conclusions about the political wellsprings of this remarkably persistent tool of government.
Table 1 shows potential outcomes stemming from combinations of two variables—federal and state political cohesion. The classic unfunded mandate outcome can be expected when federal officials are cohesive and states are either divided or not engaged. We might expect mandates to be funded and regulatory flexibility to be provided when states and federal officials are both equally engaged and cohesive. When states are cohesive and federal officials divided or unengaged, a grant or even outright defeat of federal involvement might be expected, much along the lines predicted by Monypenney (1960) who concluded that federal grants are adopted when national leaders lack sufficient consensus to agree on stronger tools. Finally, lack of cohesion and engagement from both sides can be expected to produce policy gridlock.
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The relative cohesion and intensity of federal and state actors helped explain some of the outcomes in the Bush era.12 In the face of cohesive and engaged federal leadership, the ambivalence and divisions among state officials helped pave the way for HAVA, NCLB, Real ID, and estate tax cuts. The cases of defeated federal proposals illustrate the reverse—cohesive state officials and divided or unengaged federal officials. A unified state and local campaign was indeed able to defeat such proposals, as the MTBE proposal, the Business Activity Tax, and the administration's proposed capping of the Medicaid program, taking advantage of both federal dissensus and powerful interest group support. Given the complexity of the policy process, it is not surprising that other factors influence outcomes beyond the relative cohesion of each sector. For instance, in the case of welfare reform reauthorization, states not only were cohesive and well mobilized but they also had powerful allies in social advocacy groups and Senate Democrats intent on defeating new work mandates and pressing for higher funding. Nonetheless, the persistence of Bush administration officials and conservative leadership in the Congress, along with the adroit use of budget reconciliation to sidestep a Democratic-led filibuster, were instrumental in gaining final passage.
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Conclusions |
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Federal actions constituting coercive federalism, including mandates, continue to be a major feature of our system, relied upon by a diverse range of actors to accomplish a wide variety of policy and political goals. The Bush era continues trends observed in prior decades, breaking new ground in the nationalization and centralization of policy in areas that had heretofore largely been untouched by the instruments of coercive federalism. For each of the five major areas covered in this article, cooperative federalism frameworks that had evolved over many years were overturned. Whether it be tax cooperation through tax base sharing and administration, FEMA's highly partnerial model for emergency preparedness, education's accommodation with federal equity goals, state motor vehicle departments’ cooperation in commercial drivers licensure, or the largely successful devolution of welfare achieved ten years earlier, the centralizing actions that have unfolded in the past five years mark a major turning point toward a more insistent, demanding federal role with uncertain consequences for program performance and finances.
Ironically, the familiarity and political support spawned by these more cooperative forerunners may very well have paved the way for their more coercive successors. Intergovernmental tensions and consequences have been accentuated by simultaneous federal actions that both increase intergovernmental fiscal burdens through spending mandates and limit revenues available to state and local governments to finance these far-flung federal policy initiatives. The combined effect of these initiatives will work together to encumber a greater share of the fiscal commons for national policy initiatives than we have seen in the past.
One is also impressed with the broad support many of these initiatives attained across both federal and state actors in our system. Policy issues increasingly sweep over federal and state governments alike in waves of enthusiasm that know few political boundaries. In a nationalized media culture, state and national political communities and values have become more integrated, and state and local leaders have become every bit as vulnerable to the same publicly compelling policy stampedes as are national leaders. Jurisdictional boundaries have increasingly become permeable; federal grants have prompted the institutionalization of national values and interests in state governments while state policy innovations increasingly seeded the national agenda with compelling new problem definitions and solutions.
Cross-pressured by overlapping allegiances to national values and interests, state and local officials have become uncertain trumpeters of their own prerogatives in the federal system. Federal and state governments perceive an advantage to "borrowing authority" to engage the resources, authority and legitimacy of other levels of government (Manna 2006). In essence, all levels of government are increasingly engaged in an "opportunistic federalism" where all actors in the system attempt to use one another to achieve particular policy goals, irrespective of traditional boundaries and authority distributions (Conlan 2006). While the Supreme Court has resumed its role in recent times of policing the boundaries, John Kincaid argues that the court has undergone a "federalism fizzle" in ruling against states on recent preemption cases in the past several years (Kincaid 2006).
As the United States faces such vexing challenges as the baby boom retirement and global economic change, marbleized, networked approaches to governance may in fact be necessary to respond to daunting problems. Whether it be health care costs, climate change or education, intergovernmental responses will be necessary. In "borrowing authority," however, it matters whether cooperative or coercive federalism tools are engaged. While perhaps more efficient to respond to insistent national majorities, coercive strategies have the potential to short circuit the feedback loops in our system, curtailing the potential for policy learning through the accretion of experience gained by state and local governments. And most certainly, such strategies also can work to undercut the ability of our system to accommodate the diversity of our nation and the vitality of our federal system.
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Notes |
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Correspondence: pposner{at}gmu.edu
1 A superwaiver would give the executive branch authority to override statutory or regulatory regulations in a many low-income programs. It would be initiated at the request of a governor. 
2 UMRA provides that any mandate with an uncompensated state and local cost greater than $50 million a year net of savings and direct federal funding can be stopped by a point of order raised on the House or Senate floor. However, conditions of grants are excluded from UMRA.
3 While not enough to fully cover all incremental costs, federal appropriations for Title I increased by 45 percent in the five years since the passage of NCLB. U.S. Office of Management and Budget, Analytic Perspectives: Budget of the U.S. Government, Washington, DC: OMB, 2006, 102.
4 National Bellas Hess Inc. v. Illinois Department of Revenue, 386 US 753 (1967) and Quill Corporation, Petitioner v. North Dakota, by and through its Tax Commissioner, Heidi Heitkamp; 504 US 298 (1992).
5 The Streamlined Sales Tax Project (SSTP) is an effort by state governments to develop measures to design, test and implement a sales and use tax system that simplified the current system. The project was organized under the auspices of the National Governors Association and the National Conference of State Legislatures in March 2000.
6 Homeland Security Presidential Directive/HSPD-8, December 17, 2003.
7 Testimony of Roger Cross, Driver's License Security Issues, before the Subcommittee on Highways and Transit, Committee on Transportation and Infrastructure, House of Representatives, September 5, 2002.
8 Intelligence Reform and Terrorism Prevention Act of 2004.
9 Sources include the National Conference of State Legislatures, Mandate Monitor Washington, DC: NCSL, October 16, 2006, Vol. 4, Issue 4; Congressional Budget Office, A Review of CBO’s Activities under the Unfunded Mandate Reform Act, 1996–2005.
10 Kelo, et al. v. City of New London et al., June 23, 2005.
11 Congressional Research Service, Condemnation of Private Property for Economic Development Washington, DC: CRS, December 22, 2005.
12 Cohesion is defined as degree of agreement and political mobilization or engagement. At the federal level, defined by degree of consensus achieved across parties. Cohesion for state officials is based on positions taken by the leading organizations of state officials, most often the National Governors Association. States scored low in cohesion when they were generally supportive of federal policy frameworks; the states received slightly higher scores when they were able to must cohesion around the need for greater funding and flexibility, as they did for Real ID, NCLB, and HAVA.
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