July | August 2017






Cooperation Difficult, but Necessary, for States and Feds

By Jennifer Ginn, CSG Associate Editor
Federal, state and local governments can work together, but it’s not often easy.
“Often, the federal, state and local relationship has the characteristics of a Cerberus, this is the three-headed monster,” said Ed DeSeve, senior adviser at the Brookings Institution and special adviser to the president of the United States. “Federal, state and local snarling, not being able to get forward.”
DeSeve was one of the featured speakers at a recent CSG eCademy, “The Ins and Outs of Executive Branch Federalism.” It was the first of a three-part Civics Education Series.
DeSeve worked with President Barack Obama and Vice President Joe Biden to implement the American Recovery and Reinvestment Act, the federal government’s bid to get the country out of the Great Recession. DeSeve said when he was called in to the vice president’s office two days after the act passed on Feb. 13, 2009, the economy was “worse than they knew.”
“They didn’t know that over a million and a half jobs were lost in November and December (of 2008), because that data hadn’t come in yet,” he said. “They didn’t know that the current recession was going to be significantly worse than the ’81 recession, the ’90 recession or the 2001 recession. It was steeper and deeper.”
DeSeve said he learned several important lessons while trying to implement the act, which pumped more than $800 billion into a struggling American economy for everything from the construction of new roads and keeping teachers employed, to helping states shoulder Medicaid costs and burgeoning unemployment rolls.
“We learned first, attention from the top matters,” DeSeve said. “The president was quite committed to making this thing work. In a Cabinet meeting once, he told me that the only thing less popular in Washington, D.C., than him was my program. That didn’t make me feel good, but what he meant was the program itself wasn’t popular, but the elements of the program were. He was very much engaged.”
Transparency about where those funds were going was important, he said, to minimize fraud. Obama and Biden also were keen to see that red tape was streamlined to make sure the money rolled out quickly and was spent well.
“The folks at OMB (Office of Management and Budget) and my office worked to create a single accountable individual at federal agencies and single accountability in states,” DeSeve said. “So I knew Susie from Minnesota; I knew Charlie from Florida by name. We had phone calls with them probably about twice a month outside the calls from the vice president. What that led to was an ability to solve problems very quickly.”
Raymond Scheppach, senior lecturer in public policy at the University of Virginia and former executive director of the National Governors Association, said it was close relationships that helped him negotiate an agreement with the federal government over Medicaid provider taxes in the early ‘90s while he was with NGA.
The negotiating team consisted of three people from NGA and three from the administration. Scheppach said he asked each governor to appoint a single staff person who had the power to make decisions to streamline communication. It was that communication that was vital to coming to a workable agreement on both sides.
“Each side got to be very honest about what would fly with their own bosses,” Scheppach said. “That was very important because in some states, we had to push very hard because we knew if we didn’t get what they were asking for, we had a huge problem.
“We had to lay our cards pretty much on the table about what we needed with respect to each state. They (the federal government negotiators) also did that. The honesty, I think, over time really helped us get it done.”
Ingrid Schroeder, director of fiscal federalism initiatives at the Pew Charitable Trusts, said it is important for everyone to remember how much federal, state and local governments are intertwined. Transportation, she said, is a good example of that connection.
“Transportation happens to be the third-largest of the federal grants to states, behind Medicaid and income security,” Schroeder said. “It also happens to be a policy area that is being actively discussed at the federal level and in the states.
“And finally, it’s a great example to highlight how the federal-state fiscal relationship is intertwined and facing similar challenges, mainly shrinking revenues. All levels of government make a significant contribution to transportation funding and the funding system as a whole is deeply intertwined.”
But working with the federal government can be hard for states, Schroeder said. There is a lack of data about how much federal spending is going into the states since the U.S. Census Bureau in 2012 stopped producing a geographical look at the distribution of federal spending.
“A second important lesson is we need to figure out effective opportunities and venues for state and federal policymakers to meet and discuss these issues,” she said. “Many of the venues that previously existed in the federal government no longer exist. The Advisory Committee on Intergovernmental Relations was abolished in 1996 and other federal executive branch offices no longer exist or exist more as a public relations or outreach office.”
There are examples, however, that the executive branch is beginning to reach out more and get state input. The Department of Transportation’s draft of a 30-year plan called “Beyond Traffic,” asked states for their input, Schroeder said. A White House task force on immigrants’ integration into communities also asked for input from state leaders.
“Bottom line, what we’ve learned is there are some really good opportunities to engage in discussion and craft policies that understand and acknowledge that there is a relationship between all levels of government,” Schroeder said. “But I also think that there needs to be effort from both sides to engage in these discussions and use data to move them forward.”
eCademy: "The Ins and Outs of Executive Branch Federalism.”
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