States are better

The $750 billion aid system is a roundabout way to fund state and local activities that the deficit‐​ridden federal government cannot afford. The aid system does not deliver efficient public services, but rather delivers bureaucracy, overspending, and federal micromanagement. It undermines policy diversity and political accountability. The states are entirely capable of funding and operating their own programs. President Reagan’s 1987 executive order on federalism noted, “In most areas of governmental concern, the states uniquely possess the constitutional authority, the resources, and the competence to discern the sentiments of the people and to govern accordingly.” President Trump’s most recent budget proposed small cuts to federal aid. But that proposed reform provoked a prominent liberal think tank to issue a study defending aid. The study’s first sentence was, “Federal funds that go to state and local governments as grants help finance critical programs and services on which residents of every state rely.” But if aid funds “critical” programs, then federal cuts would prompt the states to fill the void with their own programs, and those programs would likely be superior for the reasons discussed. It is understandable that federal policymakers are eager to try and fix the nation’s many ills. But they should appreciate that the states can handle domestic policies by themselves and that federal intervention is often counterproductive. The optimism of previous decades about the ability of federal aid programs to efficiently solve state and local problems was misguided.