Week in Review: Federal aid

Andy Matthews

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It’s not often that I defend Harry Reid, but I remember an occasion a few years ago when I found myself doing just that.

A report had come out — I don’t recall who produced it — showing that Nevada ranked near the bottom of the 50 states in terms of the amount of aid received from the federal government. Reid was criticized for not doing more to “bring home the bacon,” as the expression goes, and if I recall correctly, the list of those who called him out included a number of self-professed fiscal conservatives. I understand the temptation to take aim at one’s political rivals anytime an opportunity presents itself. But I also felt that in this case, the criticism was misguided.

Whatever we may want from our national representatives, adeptness in steering federal pork back home should not be among our wishes. I’ll grant an obvious point here: Nevada’s low ranking almost certainly did not result from any principled opposition on Reid’s part to doling out federal aid. More likely is that he simply proved less proficient at it than his colleagues. So in truth, I wasn’t defending Reid so much as I was wishing his detractors would recognize that this was the wrong fight to pick.

What caused me to think back to that debate was the release recently of a new study from the Tax Foundation, which finds that Nevada continues to lag most of the other states when it comes to reeling in federal dollars. For fiscal year 2012, the Silver State ranked 44th in the nation in federal aid as a percentage of state general revenue.

A few observations in looking at that map: First, there doesn’t appear to be any really obvious red-state/blue-state pattern when it comes to receiving federal aid. While the states that bring in the most (Mississippi, Louisiana, Tennessee and South Dakota take up the top four spots, in that order) tend to vote Republican at the national level, the states that receive the least federal aid (Alaska is No. 50 and North Dakota is No. 49) do as well. Being a “conservative” state, in other words, doesn’t necessarily mean you’re more likely to eschew federal money. But nor are you any less likely to do so.

Second, the geographical distribution of federal aid doesn’t show a whole lot of consistency, either, with the exception that a majority of the Southeastern states fall in the top half of recipients (with South Carolina, Florida and Virginia the exceptions). One can find lots of examples of bordering states that are on opposite ends of the scale. The Dakotas (already noted above) provide one such example, as do Missouri and Kansas (Nos. 5 and 41, respectively), Oregon and Washington (12 and 37) and Arizona and Nevada (10 and 44).

But the most important takeaway from the study is this: There is way too much money being thrown around by our politicians in Washington, D.C. Mississippi, the state that topped the Tax Foundation’s list, receives a whopping 45.3 percent of its state general revenues from the federal government. That’s alarming, to be sure. But what I found even more notable was that Alaska, which ranked last, still gets 20 percent of its revenue from the feds. Think about that — even in the state least dependent on the national government for aid, one in every five dollars still comes from our nation’s capital. (The percentage for Nevada is 25.5.)

As noted above, this is very much a bi-partisan problem. Politicians of both parties regularly run for office on the promise that, “If elected, I will deliver for our state.” And by “deliver,” of course, they mean they’ll pack federal legislation with as many giveaways to their constituents as possible, never mind that we’ve long since passed the point where our country can afford it.

What’s needed from our nationally elected officials today, more than ever, is the courage to say "no." They need to look at the voters in their districts and say, “If elected, I’m going to work as hard as I can to limit our state’s dependence on federal money, and to stop the gravy train from running to all the other states, too. I’ll protect and defend our Constitution, and I’ll work to advance national policies that keep you free. Beyond that, I’m not going to promise you a thing.”

Of course, we don’t often hear this from our political class. The incentives to promise the moon are usually far too great, and the rewards for showing genuine fiscal responsibility far too small by comparison.

And so every day, the crisis continues to grow more severe.

Last year’s elections swept into office a whole lot of candidates who call themselves fiscal conservatives. No doubt their principles and ideological instincts point that way. But talk is cheap. And the citizens of our nation deserve serious action that leads to the implementation of fiscally responsible policies.

Cutting federal aid to the states — ours included — would be a great place to start.

Thanks for reading, and take care.

Andy Matthews
NPRI President

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