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The Advisory Committee on Intergovernmental Relations was abolished, a victim of rising partisanship in our politics. Medicaid is now the primary vehicle for the expansion of health care to the uninsured.

Whether this is a temporary change in the state-federal relationship or a more permanent one remains to be seen. The Obama administration has expanded the use of the carrot in federal financial assistance to achieve its goals, particularly in education with the Race to the Top competition for funds. Pushback has begun, however, with a number of states opting not to participate. What remains will be a large federal deficit. The search for new revenues could have a major effect on traditional state revenue sources, particularly a national Value Added Tax on state sales taxes.

The creative tension in federalism, however, can only be maintained by allowing a broad freedom of action in the states and avoiding over-reaching federal preemption and mandates. Under the vast new federal health reform, conflicts over the regulation of insurers, the operations of the exchange programs and risk pool funding are unavoidable.

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An Observation of the State-Federal Relationship

This will only increase with health care expansion. Either solution will affect state governments. Its future will likely see both cooperation and conflict.

It is easy to see considerable state-federal tension arising from this debate. The recent Arizona immigration law, state renewable energy standards, greenhouse gas standards, universal health coverage in several states, and education reform are examples.

Future federal spending on domestic discretionary programs will be flat or declining. Federalism is, by its nature, ladies free dating site a system of dynamic tension between levels of government and is constantly evolving into new relationships between states and the nation.

Before the Civil War, states generally dominated American federalism. Reducing the deficit will require reduced spending or new revenues, or both. Many of the formal mechanisms of intergovernmental cooperation have been eliminated. Pound is executive director of the National Conference of State Legislatures. The temporary stimulus of the American Recovery and Reinvestment Act funds soon will be over and their impact on cushioning state budgets from the downturn will be gone.

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