Until January, the federal government and the states had a mutually beneficial and straightforward deal: The federal government prioritized challenges requiring national solutions — e.g., national security, natural and public-health disaster relief, managing the American economy. For their part, the states delivered primarily local goods and services — Medicaid and Medicare, much of our transportation infrastructure, public education.
Money, specifically taxpayer money, underpinned this deal. In 2023, the federal government collected about $4.7 trillion in taxes, sending back about $4.6 trillion to the states, mainly via social service programs. (The remainder of that year’s roughly $6 trillion in federal spending was mostly financed by debt.)
Now, this deal between Washington and the states is unraveling to tragic effect.
In May, tornados ravaged communities in Kentucky and Missouri, killing 27 people. Because of cuts to the federal government in recent months, the National Weather Service is now stretched too thin to alert rural communities in the heartland about such deadly weather. Ordinarily, after such disasters, the feds could be counted on to provide relief. That too is far from a certainty. When natural disaster strikes — as it did in Arkansas this year in the form of severe storms and tornadoes — federal aid was initially denied and ultimately arrived weeks late. Similar aid was denied to those in West Virginia, Washington state and North Carolina. Meanwhile, normal and emergency disbursements to states and localities are being withheld or threatened explicitly because the administration dislikes a state’s LGBTQ+-friendly policies or immigrant healthcare.
We are just a little over four months into a four-year presidency, with seemingly more cuts to come. In late May, the federal government canceled a contract to develop a new vaccine to protect against flu strains with pandemic potential (including the H5N1 bird flu), alarming state public health officials across the nation.
Some decisions by the feds have been successfully challenged in the courts. Realistically though, there is only so much the judges can and will do to force federal agencies to spend, especially when Congress endorses spending cuts. Meanwhile, states have duties and obligations to their residents. But making up for the massive federal shortfall is no easy feat. No state, acting alone, could come close to replicating the goods and services that the feds are no longer supplying. Each lacks economies of scale; the cost per person is prohibitively high without the bargaining power and efficiency of the federal government.
The answer, quite simply, is for the states to pool their resources, thereby spreading the costs over a far wider number of taxpayers.
Here are some examples of what clusters of like-minded states could do: set up interstate academic programs that pool students and faculty cut off from federal funds into large regional research consortia; re-create public-health and meteorology forecasting centers servicing member states; and finance pandemic planning and countermeasures, precisely what was lacking — and sorely needed — early in the COVID-19 crisis.
Though some may assume these arrangements require congressional authorization, the courts have said otherwise, insisting such approval is necessary only when states threaten federal supremacy. (The converse would be true here. The states would be teaming up only because the feds have absented themselves.)
Additional arrangements can be even looser understandings. Consider the vacuum created now that the Justice Department has disbanded the team that focused on corruption among officials and fraud by government employees. States can mobilize interstate criminal task forces to track and prosecute corruption by politicians, lobbyists and government contractors (who invariably, when violating federal laws, run afoul of myriad state laws, too).
The Trump administration is also tabling consumer protection and environmental investigations and prosecutions. Here too states can pool their resources, extend their jurisdictional reach and protect their citizens, while possibly recouping some expenses. Successful litigation often carries with it awards of legal fees and sometimes damages or monetary bounties: Lawsuits brought by states could force polluters to pay for the damage they do.
Of course, not all states will jump into action, at least not at first. But this is a feature, not a bug, of the coming clustering of like-minded states. The Trump administration has created an opportunity for beneficial “races to the top” in regulatory matters.
Here’s how that works: As Washington abdicates its long-relied-upon responsibilities, those states that commit to making up for the federal shortfalls will retain residents and businesses. They’ll also attract new ones, particularly those frustrated that their home states aren’t taking similar compensatory measures.
High-tax states are often at a competitive disadvantage, as evidenced by what the Wall Street Journal has repeatedly referred to as a “Blue state exodus.” But we think that’s less likely to happen going forward. Precisely because the feds are no longer promising to fund basic education, infrastructure and social services — and are no longer viewed as a reliable regulator — it’s suddenly too risky to chance living or operating a business in a state that doesn’t take basic health and safety seriously.
Interstate collaboration isn’t a cure-all, but it’s a start on rebuilding a new national compact without the political strings that have been attached to federal funding in recent months, one that may endure for the foreseeable future. It’s a chance to demonstrate resourceful, resilient and good-faith public service at a time when the risk of being worn down into complacency is perilously high.
Aziz Z. Huq and Jon D. Michaels are professors of law at the University of Chicago and UCLA, respectively.
The post Contributor: As the feds abdicate responsibilities, states should band together appeared first on Los Angeles Times.
