President Lyndon Johnson’s “War on Poverty” taught us what happens when well-meaning (to give them benefit of the doubt) politicians and bureaucrats create a welfare system that rewards those who shun work, while punishing those who try to take responsibility for themselves. Those perverse incentives create a cycle of welfare dependency that grips the poor and their offspring for decades.
So why don’t we recognize that the same system, when directed at states rather than people, will also create a state cycle of dependency?
Washington has become little more than a sugar daddy to the states, handing out money for a whole range of needs—health care, welfare, highways and other infrastructure needs, education, environmental concerns, and most recently bail out dollars. But those funds come with strings—strings that give the feds indirect control over state policies.
For years the states were willing to embrace their sugar daddy to get the funds and accepted the conditions … until recently. When President Obama came bearing stimulus funds, a handful of states—South Carolina, Texas, Mississippi and Louisiana— pushed back, at least against part of the funds. Some were concerned that new federally imposed mandates on unemployment benefits would eventually cost the state more than it was receiving.
Now Washington has passed a $26 billion handout to the states for education and unemployment, and states are thrilled.
Ironically, the states’ embrace of the handouts comes at a time when many of them are trying to reassert their rights and independence under the Tenth Amendment of the U.S. Constitution. They want Washington to quite bossing them around, even as governors plead for more federal assistance. The two can’t co-exist.
It would take tremendous political courage at the state level, but we’d love to see a movement from the state legislatures that summarily rejected federal handouts, including the matching grants for Medicaid recipients.
Step up, states, and break that cycle of dependency.
And if Congress weren’t handing money back to the states, it wouldn’t need to extract those funds from taxpayers in the states. Less money from taxpayers and more independence for the states; a win-win for the states and the taxpayers.