Tad DeHaven

In addition to not being free, federal subsidization of state spending makes it harder for taxpayers to understand and appreciate where their money is going and how it’s being spent. A Cato essay on fiscal federalism explains:

The three layers of government in the United States no longer resemble the tidy layer cake that existed in the 19th century. Instead, they are like a jumbled marble cake with responsibilities fragmented across multiple layers. Federal aid has made it difficult for citizens to figure out which level of government is responsible for particular policy outcomes. All three levels of government play big roles in such areas as transportation and education, thus making accountability difficult. Politicians have become skilled at pointing fingers of blame at other levels of government, as was evident in the aftermath of Hurricane Katrina. When every government is responsible for an activity, no government is responsible.

As we’ve been arguing over at Downsizing Government, it is well past time that the trend toward greater centralization of power in Washington is reversed. With the country bouncing from manufactured fiscal crisis to manufactured fiscal crisis, the need for a return to fiscal federalism has never been greater.

Of course, getting federal policymakers to give up power is like asking a starving pit bull to part with a slab of beef. And even though state policymakers often complain when the feds get heavy-handed, their attitude is different when it comes to taking federal money. Why ask your state’s taxpayers to pony up the funds to feed your spending appetite when Uncle Sam can do the dirty work (or just use his credit card)?

Tad DeHaven

Tad DeHaven is a budget analyst at the Cato Institute. Previously he was a deputy director of the Indiana Office of Management and Budget. DeHaven also worked as a budget policy advisor to Senators Jeff Sessions (R-AL) and Tom Coburn (R-OK).