When Florida Governor Rick Scott turned down $2.4 billion from the Feds for high-speed rail, he exercised the wisdom that has escaped money-grabbers elsewhere. Their greed inevitably costs them in the long run, because federal aid to states has no more stability than a rubber crutch.
Individual Federal grant-in-aid programs for the states climbed to 1,122 last year. That compares with 463 programs in 1990. Health and Human Services Department (HHS)—as if the federal government had a spill-over surplus– handed out 297 programs at a federal Treasury cost of $356.7 billion. The Education Department was a striving second-place grantor of 109 programs amounting to $86.5 billion. These figures come from a Cato Institute study.
So, why did Florida’s Gov. Scott spurn the hand-out? The money was a gift from big daddy in Washington to build a rail link between Tampa and Orlando. This idea that has been discussed a dissed in Florida for more than 30 years. The arguments against it are overwhelming.
Gov. Scott’s decision came just days after Obama revealed his ambitions for a $53 billion, six-year plan for a high-speed rail network in America. Florida was where it was all supposed to start. The Tampa-Orlando project would not even be very high speed. It would have had at least four station stops along the way. Scott argued that costs would whirl out of control and Florida’s taxpayers would get stuck paying operating subsidies—just as has happened with other rail projects.
Two other governors, Scott Walker of Wisconsin and John Kasich of Ohio, also have said “thanks, but no thanks” to federal payments to build high-speed rail service. Neither wanted their states’ taxpayers to have to cover inevitable construction shortfalls and operating costs, according to transportation expert Wendell Cox. In an article in National Review Online, Cox called high-speed rail “a budget buster.” And Obama, in one of his more bizarre wishes, wants fast trains available to 80 percent of Americans.
Another big state governor, Chris Christie of New Jersey, said no to another project involving federal money, but which would have cost the state big bucks. Christie announced in October that New Jersey would not fork over a share of the money for a new train tunnel taking commuters under the Hudson River to Manhattan. Without Jersey’s $2.7 billion, the tunnel—the largest transportation project in the country–won’t be built, and the state won’t be stuck with inevitable cost overruns.
More than 1,000 grant programs are offered by 26 federal grant-making agencies, according to Grants.gov., a federal website.
The Department of Education, which offered 109 “aid-to-state” programs valued at $86.5 billion in 2010 has delusions of adequacy. It believes any gimmick will work. The latest is the Race to the Top (RTTT), a $3.4 billion carrot was held out to states if they could meet the Department’s goals of national standards, use teacher standards guided by the federal government, require educational data systems, and treat low-performing schools differently. By pure coincidence most of the winners were states where Obama sought political support. In Canada, the federal government is not involved in the schools, but the kids score higher than U.S. kids.
Health and Human Services (HHS) has 297 aid-to-state programs to give away $356.7 billion, according to the Cato study. One health grant program, listed on Grants.gov offers $16 million to support 10 awards to fund pilot sites to be shared with other states or communities, “such as giving patients access to their own health information.” Health Information Exchange Cooperative Agreements already have provided $500 million to states for “health information exchange.”
Two-thirds of federal aid programs have matching requirements. The open-ended federal match under Medicaid (health program for the poor) has nudged states to expand continuously health benefits and the number of eligible beneficiaries. Many states have designed complex schemes to artificially raise federal matching payments under Medicaid and (a reverse twist) to fleece federal taxpayers. Medicaid should be in block grants, and states should have the flexibility to design the provisions in their state. programs.
The department of Justice has an obscure Office of Violence Against Women (OVW) program for women over age 50. In describing the office, it states that, for the $3 million program, it will play a substantial role in shaping and monitoring the project (which may be run by practically any local governmental body). “Award recipients should be aware they will be required to receive and participate actively in technical assistance throughout the project,” the description of the office reminds possible recipients. violence by its standards includes not only physical abuse, but also “intimidation” and “mental anguish.”
Forty–five awards in the category of arts grants in amounts up to $1 million to elevate museum or library practice to preserve culture and “provide 21st century knowledge in support of a world-class workforce” and to “extend the benefits of federal investment” and increase community participation—whatever all that means.
A grant program for historically black colleges and universities of $2.5 million seeks to “address community development needs, principally for persons of low and middle income.”
Under our Constitution, the federal government was given limited powers. The Framers said in the Tenth Amendment certain powers are reserved to he states or to the people. Proper federal functions “are few and defined,” as James Madison wrote.
“The theory behind aid is that the federal government can efficiently solve local problems, but decades of experience has shown that it cannot,” as director of Cato tax [policy studies Chris Edwards, says. He lists eight reasons (summarized here) to terminate federal aid-to-state programs: l. There’s no magical deep-pocket source of federal money, especially with our current deficit. 2. Aid programs often contain rules that encourage overspending. 3. Services have often been singled out at the behest of pressure groups or politics. 4. Aid reduces innovation; its top-down rules mandate policy conformity. 6. It is intensely bureaucratic and administratively costly. 7. When every government has a hand in, nobody is responsible. 8. It’s a phony argument that every problem has “national implications.”
Plainly, federal aid undermines frugal and accountable government.
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