The federal government, of course, has long leveraged its financial power as a way to direct the actions of state agencies that become addicted to the cash fix. One well-known example was the National Minimum Drinking Age Act of 1984, which threatened to cut 10 percent of federal highway funds in states that failed to increase the minimum drinking age to 21. The states, eager not to lose federal highway funds, quickly kowtowed to Uncle Sam, notwithstanding the fact that the power to set a minimum age for alcohol consumption was not considered a federal responsibility.
Similarly, states face challenges today in deciding whether to accept their position in the president’s Affordable Healthcare Act, which would require them to vastly expand Medicaid coverage in return for some federal dollars. In a rare break with customary acquiescence by state government, Texas Governor Rick Perry and 18 other Republican governors are refusing to bite this baited hooked, even though it could wind up costing their states billions of dollars in federal funding.
“Texas will not be held hostage to the Obama administration’s attempt to force us into this fool’s errand,” Perry told reporters this week at a press conference about his decision to refuse Obamacare’s new Medicaid requirements. Perry also said that other governors who fell into the Obama administration’s fiscal honeypot would “come to rue the day” as healthcare costs rise, pushing states further into debt.
Perry understands what many other state officials fail to realize: federal dollars are an addictive drug that comes always with strings attached. Accepting federal funding undermines state sovereignty as states become beholden to federal requirements in order to keep the money flowing. It grabs hold of government institutions just as it does with individuals like Beverly Hall.
Human nature -- and the inherent nature of bureaucracies to perpetuate themselves with funding -- unfortunately means this problem will remain with us so long as Washington money continues to serve as the tail wagging the government dog.