If you’re going to ask for a favor, I guess you should make it a big one. The Washington Post reports this morning that Governor Ted Strickland of Ohio recently called President-Elect Obama’s Chief of Staff and left this message on his answering machine.
”Rahm, it’s Ted. You’ve never failed me and I need five billion.”
Economic conditions in the states have clearly taken a major turn for the worse. The Fiscal Survey of the States, a project undertaken by the National Governors Association and the National Association of State Budget Officers (NASBO), describes in sober prose and extensive detail just how quickly and rapidly the bad times have taken hold.
And it is not surprising that Governors are beseeching the President-Elect to help them. On one hand, states can probably administer some of the projects likely to be in the stimulus plan far more effectively than the feds. In addition, states now spend almost one in every five dollars on Medicaid, a requirement that did not come entirely from choices made on their own.
This is precisely the right time to reconsider how federalism actually operates today. In many areas, such as k-12 education, states should be given more flexibility from onerous federal requirements. In others such as Medicaid, more flexibility and a fundamental rethinking of the respective roles of the state and federal government should take place.
But it is important that efforts to assist states do not reward them for their own bad choices and lack of fiscal discipline. States such as Virginia that have been well managed over the years should not foot the bill for others now claiming that they are “too large to fail.”
If Ted needs five billion, Rahm must be dreading the call from ARNOLD.
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