Magazine article Brookings Review

Unfunded Mandates: Balancing State and National Needs

Magazine article Brookings Review

Unfunded Mandates: Balancing State and National Needs

Article excerpt

Among its first acts, the new 104th-Congress passed legislation to limit unfunded mandates. The legislation curbs the federal government's power to require state and local governments to undertake major new programs without providing the funding for those programs. Under the new law Congress must either pay for any newly mandated programs - and identify a federal agency charged with reducing or eliminating the mandate requirements if Congress fails to provide full financing - or cast a separate vote indicating its intent to impose an unfunded mandate.

Origins of Consensus

The speed with which Congress acted on this issue suggests something approaching a national consensus that Washington has been imposing undue burdens on states and localities. Indeed, state and local officials - urban and rural, liberal and conservative, Republican and Democrat - appear to be largely of one mind in challenging the legitimacy of federal unfunded mandates. Even when these officials accept the intent of a particular federal mandate, they argue that Washington is wrong to substitute its priorities for local preferences. In a world of limited resources, they say, states and localities are increasingly unable to implement their own policies because of the burdens and requirements imposed by the federal government.

In requiring states and localities to spend their own resources to fulfill the mandate, federal officials are not subject to normal political constraints. They do not have to impose higher taxes or make difficult decisions about spending priorities to pay for the public services they mandate. The result may be an inefficient allocation of resources. The new mandate legislation, by requiring a separate vote on any new unfunded mandate, attempts to reassert those political constraints. The congressional action explicitly signals voters regarding the level of government responsible for the taxes or spending choices required to finance unfunded mandates.

Consensus around unfunded mandates grew out of fiscal difficulties facing state and local officials in recent years. State and local policymakers confronted with budget deficits, spending cuts, and tax increases naturally began looking for the source of their troubles. They identified a range of potential causes, including the recent recession, the escalating costs of Medicaid and other health care programs, the public demand for new prisons, and unfunded federal mandates. Focusing on unfunded mandates had two advantages. First, it was a problem over which some measure of control was possible. Compared with stopping recessions or running counter to the popular appetite for new prisons and longer sentences, limiting the ability of Congress to impose unfunded mandates would be easy. Second, a drive to stop unfunded mandates would dovetail with the nation's anti-Washington, anti-Congress political mood. Surely the public would be willing to blame Washington for the problems state and local officials faced.

While drawing the attention of Congress and the public to the fiscal impact of unfunded mandates has been a valuable contribution to sound public policy, the attack on unfunded mandates has obscured several important policy issues. First, imposing unfunded mandates is in many cases a legitimate assertion of national standards and may be the most efficient means of achieving them. Second, the federal government provides substantial financial assistance to states and localities for services, such as education and public safety, traditionally viewed as state and local responsibilities. Third, a major cause of fiscal stress for states and localities has been the failure of their revenue systems to keep pace with a changing economy. Finally, the constitutional amendment proposed by Republicans in Congress to require a balanced federal budget could dwarf the fiscal impact of unfunded mandates.

The Legitimacy of National Standards

In many cases it is entirely reasonable to establish national standards that everyone - including private employers, businesses, and states and localities - must observe. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.