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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Time For a National Budget

Maybe it’s the years I spent working on federal-state relations, but it’s still amazing to me how little attention is paid in Washington to the involvement of states and localities in implementing big national policies–or the impact of federal decisions on state and local operations, services and finances. That’s particularly maddening right now, when you have states on the brink of fiscal insolvency, and policy areas–particularly health care and environmental protection–where the states already play such an integral role.
Harold Pollack of the University of Chicago’s School of Social Service Administration feels likewise, so we collaborated on an article that’s in the New York Times’ Economix blog this morning. We were especially motivated by the general ignorance of intergovernmental relations exhibited in Congress and the media during the economic stimulus debate, and also by the implications of the fiscal disaster underway in California.
Our prescription was largely to start paying attention:

Americans don’t need another gauzy ideological debate over federalism and states’ rights. But we do need to pay greater attention to realities of federalism when setting national policy.
Thus, federal budget debates should expand to include the national budget, the sum total of spending, taxes and policies that implement and finance national governance. At a minimum, the Office of Management and Budget and the Congressional Budget Office should routinely scrutinize the financial impact of proposed federal policies on every level of government.
We should also scrutinize the division of roles and resources across different levels of government. The road maps of 1933 (when the first New Deal was put in place) or 1965 (when Medicare and Medicaid were signed into law) may no longer apply. Some tasks, such as long-term care, are now so costly that they require greater federal resources. Others, like regional planning, require greater state and local authority.
The likely bailout of California provides unwelcome opportunities to realign these competing roles. It provides a timely reminder: Americans live in towns, cities, counties, and states, not just the United States of America.

The “national budget” is something I’ve been occasionally talking about for, oh, at least a quarter century. But it’s not like the system has gotten any better the in interim, so there’s no time like the present to try again.

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