The Dilemma of the States

Read THIS ARTICLE which outlines how the State of Texas is struggling with the concept of Federal coercion. The coercive method used involves the Federal government taking money out of a State via taxation and then sending money back to the State in the form of Federal “grants” but attaching many conditions to it that typically involve other unrelated items that the Feds want done.

This form of coercion was enshrined in law as permissible through the Supreme Court case South Dakota v Dole in 1987. That case arose when the Feds were attempting to get a nationwide drinking age of 21. Several states had drinking ages of 18 and refused to submit to the Feds’ demands. So, the Feds told the States that in order to receive Federal highway funds, then they must submit to Federal demands. This method of Federal coercive power has now spread to many, many other areas with the full blessing of the Courts.

I personally list this Supreme Court case and it’s resultant massive sea-change type of effect on the balance of power between States and the Fed as a pivotal piece in understanding the present nature of the leviathan called our government. And, now the States are facing the repercussions of another critical problem of government:  the Federal deficit.

The Federal government has many, many things it wants to do, but it lacks the funds to deliver them directly. So, it passes a series of legislative demands, funds only a portion of it (because it cannot afford to fund all of it), and then demands that somebody else (the States or the People directly) fund the remainder. Health reform is a classic example of this strategy. The legislation creates a series of Federal mandates, creates direct Federal funding for only part of it. The rest of the funding is demanded from the States, the citizens directly (not through taxation), and from businesses.

Like many States, Texas is struggling to wrap it’s collective head around the impact of Health Reform on it’s own finances. Part of health reform binds the State to certain action through the Medicaid program. The “bait and switch” will serve to decimate the State’s ability to finance the Medicaid program. So, the State of Texas commissioned a study to review it’s options. One option is to refuse Federal funds, which in turn means that it is not bound by Federal demands.

However, the loss of Federal money may be financially devastating. Progressives in our country look at this issue with contempt. They even publish a database on which States get money back and accuse them of latching on to the Federal tit, but when the States express displeasure with Federal demands, the Progressives cry ‘foul.’ They say, almost glibly, that the States cannot have it both ways: to want small Federal intrusions but want big Federal money to flow back into their State.

This is a poor argument, because Progressives forget where the money comes from. They view the Federal coffers as some independent money stash. They forget that the money comes from the States and the People. The Progressives’ argument would be like saying that extorted shopowners who resist demands from the Mafia are two-faced.

Many States would GLADLY opt out of almost all Federal guarantees if they also could opt out of the oppressive taxation as well, including Medicare and Social Security. I’m sure that many States would gladly take the roughly 15% payroll tax and use that for internal benefits, leaving Washington DC out of the loop.

Will the Progressives consent to States opting out completely?? To the Progressives…put YOUR money where your mouth is. Leave OUR money alone.