Federalism’s days appear to be numbered. The reason isn’t so much that the power of the federal government has increased, though that’s part of it. Instead, the slow-motion death of federalism flows from the fact that a wide array of federal programs have seduced state governments into playing Washington’s tune.
This week, for example, Ohio Governor John Kasich, a conservative who first came to prominence as one of the foot soldiers of the 1994 Republican Revolution, announced that he supports the federal expansion of Medicaid, one of the central pillars of President Barack Obama’s Affordable Care Act (ACA). Opposition to ACA, and to the enormously expensive Medicaid expansion, had until recently been considered a conservative litmus test.
Kasich is the fifth Republican governor to embrace the Medicaid expansion, alongside Arizona’s Jan Brewer, Nevada’s Brian Sandoval, New Mexico’s Susana Martinez, and North Dakota’s Jack Dalrymple. And he almost certainly won’t be the last. Florida Governor Rick Scott, a former healthcare executive who strongly opposed to the Obama administration’s health reform effort in his 2010 campaign, is widely expected to do the same.
So does this represent some deep ideological reversal? Not really. Rather, it shows that state governments are almost always happy to pass the buck to the federal government. Federalism was designed to foster healthy competition among the states. Yet the proliferation of joint federal-state programs has instead left us with what Michael Greve, a law professor at George Mason University and author of The Upside-Down Constitution, calls “cartel federalism,” in which the states collude with the federal government to suppress healthy competition.
Under a fiscal federalism cartel, states don’t fund their own programs under competitive conditions. Instead, they rely on Congress to tax households nationwide and then dole out the money to state and local governments. In effect, Congress seduces state and local governments with seemingly “free” money that comes with lots of strings attached.