When in office, Reagan worked to effect that “orderly transfer.” He took aim at the massive system of “grants‐in‐aid” for the states that had been built up in the 1960s. He managed to cut the number of these subsidy programs from 434 in 1980 to 335 by 1985, and to shrink aid spending by 24 percent relative to the size of the economy. He also killed “revenue sharing,” which was a no‐strings‐attached spigot of federal cash for the states.
Unfortunately, state aid soared after Reagan left office because his successor, George H.W. Bush, had no interest in federalism. The Republican Congress of the mid‐1990s briefly revived federalism with its reform of welfare, which was one of the most wasteful state aid programs.
But since the late 1990s, subsidies for the states have risen rapidly including subsidies for health, education, and highways. In a recent study, I calculated that the number of grant‐in‐aid programs jumped from 653 in 2000 to 814 by 2006.
Sadly, the Bush administration has buried federalism. Consider that Ronald Reagan wanted to abolish the Department of Education, and he at least succeeded in roughly freezing the department’s budget. The current president, by contrast, has doubled the department’s budget and increased federal regulations imposed on the nation’s schools.
If elected, would today’s GOP candidates be Bush Republicans or Reagan Republicans? Romney, McCain, and Giuliani talk about cutting federal “waste” and “pork.” But the problem with the $2.8 trillion federal budget is not $30 billion in pork, it is $2 trillion of spending that violates the 10th Amendment to the Constitution as properly the responsibility of the states and the people.
What about presidential candidate Ron Paul? Paul is certainly a strong believer in the 10th Amendment, but he has been mainly occupied by the war in Iraq and hasn’t focused his campaign on cutting domestic spending.
That’s why I’m pleased that Fred Thompson has thrown his hat into the ring. Thompson has been talking and writing about his belief in federalism. In a recent speech, he argued that “centralized government is not the solution to all our problems…this was among the great insights of 1787, and it is just as vital in 2007.”
Thompson rightly argues that the abandonment of federalism has caused a range of pathologies including a lack of government accountability, the squelching of policy diversity between the states, and the overburdening of federal policymakers with local matters when they should be focusing on national security issues.
Federalism “is a tool to promote freedom” as Thompson puts it. So for the supposed heirs to Ronald Reagan who are running for president, let’s hear more about expanding our freedom by cutting the federal government down to constitutional size.