Abstract
The COVID-19 pandemic has presented many challenges to governments around the world. The federal structure within the United States has further complicated effective responses to mitigate the personal and economic effects of COVID. Here, we argue that the Trump administration’s approach to federalism—highlighted by the pandemic—is incapable of efficiently and effectively addressing state needs and those needs are only going to grow as a result, further exacerbating the problem. This form of federalism, which we dub “transactional federalism,” is likely to have deleterious effects on state infrastructure, much of which is already in need. The long-term effects of transactional federalism are likely to weaken state efforts to address critical infrastructure needs.
Choate and Walter (1983) argued that infrastructure within the United States was deteriorating faster than it could be repaired or replaced, and the solution was for the executive branch to prioritize spending. Specifically, they argued that strong presidential leadership and intergovernmental coordination could overcome the problem of crumbling infrastructure and stimulate the economy in a profound way. Nearly 40 years later the problem remains, but there seemed to be a renewed interest in addressing infrastructure in recent years. Indeed, prior to the 2016 presidential election, then-candidate Donald Trump proposed spending more than $1 trillion on infrastructure including roads, bridges, broadband networks, and the like if he won the presidency (Newman, 2016). At the time, it nearly tripled the spending of the infrastructure plan proposed by his Democratic opponent Hillary Clinton (Bryan, 2016a). Moreover, this was one of the few ideas on which these candidates agreed, and government spending on infrastructure had general support from both political parties as well as much of the private economic sector (Bryan, 2016b; Udland, 2016). The initial plan was to dedicate one of the first weeks of the new administration to working on this important policy to draft and pass legislation, and the term “infrastructure week” was created.
However, three and a half years later, the idea of “infrastructure week” has long since become a running joke of sorts on Capitol Hill (Rogers, 2019). Despite the recognition of the importance of addressing the infrastructure needs of the country and the accompanying consensus support for a bill to address those needs, no such legislation has been passed. At various points in time throughout the Trump administration, there have been discussions and developments, but all have ultimately been derailed or sidelined. Indeed, one such meeting involving Speaker of the House Nancy Pelosi and Senate Minority Leader Chuck Schumer left both expressing positivity about the negotiations and said they would be pursuing a $2 trillion package with the White House. However, continued discussions would not come to pass as other issues and partisan rifts took center stage (Rogers, 2019).
Now, in the midst of the COVID-19 pandemic and the related economic downturn, the idea of an infrastructure package has been given new life. As the two political parties struggle to define what a fourth major stimulus package would entail, many—including those within the president’s party—have suggested returning to infrastructure to stimulate economic growth (Brewster, 2020). Senator Lindsey Graham, a close ally of President Trump, explicitly stated, “I want to do infrastructure” (Raju & Fox, 2020). However, if past attempts are any indication, this legislation seems unlikely to pass. Indeed, many have reiterated that an agreement is “still a long way off” (Lewis, 2020).
The importance of infrastructure to the national economy, state economies, and the ability of states and communities to meet national policy goals, cannot be overstated. In the past, infrastructure policy has been piecemeal and uncertain. However, past national infrastructure initiatives have also tended to treat states and communities with at least some degree of fairness and equity, and have often tied federal dollars to need. The old aphorism that “a rising tide lifts all boats” is instructive here: infrastructure benefits often extend well past the specific location of the project, and thus the benefit is widespread. The hyper-partisanship of the last decade has drastically altered the ability (and willingness) of the national government to address critical infrastructure needs throughout the country. Given the inability (or unwillingness) of the federal government to address critical infrastructure needs, many states are left to address these needs on their own—with many fewer resources. The problems inherent in this lack of federal leadership have been exacerbated by the present political environment. The consequences of this failure of federalism has been highlighted by each state’s haphazard and atomistic response to the COVID-19 pandemic. States have been forced into bidding wars over personal protective equipment (PPE), both with each other and with the federal government (Subramanian, 2020), which in turn drives up the costs and further depletes these limited resources (Feiner, 2020).
We contend that the actions of the Trump administration, and its relationships with states and local governments, can best be understood through a lens of what we refer to as “transactional federalism,” in which federalism relationships are governed by a set of exchanges between the president and states, and between states. This has created inefficiencies as well as confusion for states over how to address their needs (Kumar & Bade, 2020), and has longer-term implications for how the national government and states meet infrastructure needs.
Transactional Federalism
The issue of the relationship between the national government and state governments has been described by Kettl (2020) as the question of American governance. Since the founding of the nation, scholars have sought to define (and redefine) the terms of this relationship, to the point that it often seems that the only constant in American federalism is change itself. While the overall trend has tended toward a greater role for the national government at the expense of state authority, the 1980s witnessed something of a resurgence in states’ rights. Often referred to as “Reagan federalism” (see Conlan, 1988), the goal was to reduce the size, scope, and cost of the national government, and to return both programmatic and fiscal responsibility to the states. This is evidenced by what is likely the longest-lived example of Reagan federalism, the Water Quality Act (WQA) of 1987. The WQA replaced the existing infrastructure categorical grant program with a block grant known as the Clean Water State Revolving Loan Fund (CWSRF) program, with the provision that states needed to guarantee the viability of the fund in perpetuity.
The new millennium has ushered in a new breed of federalism, one marked by the same hyper-partisanship permeating politics at all levels of the nation. Different scholars have categorized this period slightly differently: Bowling and Pickerill (2013) use the term “fragmented federalism;” Bulman-Pozen (2014) suggests the US is in a period of “partisan federalism”; Gamkhar and Pickerill (2012) employ the term “fend-for-yourself federalism”; and Gerken (2014, 2017) suggests that hyper-partisanship creates opportunities for “uncooperative federalism” as states seek to deny national policy goals. At their core, all of these terms essentially describe the same setting: one in which political divisiveness dominates even routine intergovernmental relationships, to the point that national policy implementation, and policy outcomes, are heavily dependent on partisan identification.
The election of Donald Trump in 2016 has opened the door for yet another variation; Bowling et al. (2020) refer to the current form as “transactional federalism.” A product of the personal proclivities of the president, transactional federalism represents a market-based model of intergovernmental relationships in which the core feature is a form of market exchange. This approach to federalism has become more obvious during the national response to the COVID-19 pandemic.
The exchanges take two basic forms. In the first, the transaction takes place between the national government (often directly with the president) and the state (often in the form of the governor of the state). For example, when New York’s Governor Andrew Cuomo begged the federal government to release its supply of emergency ventilators to ease critical shortages, Trump’s response was “It’s a two-way street, they have to treat us well also” (Rupar, 2020). The message was clear: in exchange for compliments and praise, the national government (the president) would release ventilators to the states.
The second form is a competition between states in the absence of federal leadership or planning. Again, taking an example from the COVID-19 pandemic, many states were in dire need of PPE for front-line medical workers, police, and fire departments. In response to pleas from both Republican and Democratic governors, Trump asserted that “Governors are supposed to be doing a lot of this work. . . the federal government is not supposed to be out there buying vast amounts of items and then shipping” (Forgey, 2020). Many observers pointed out that the federal government has considerably more buying power (and market authority) than do most states, and that having states compete against each other for vital supplies was counterproductive. It is also the case that not all states can compete equally. Faced with a critical shortage of testing kits, Governor Larry Hogan of Maryland announced that he had been able to secure 500,000 testing kits from South Korea (Suderman et al., 2020). This was only possible because the governor’s wife is Korean-born, a connection no other governor could make. The net result that Maryland was better positioned to compete for testing kits, but other states were not so well-positioned.
Implications for Infrastructure
Transactional federalism has potentially significant implications for the nation’s infrastructure as well. While Congress authorizes and appropriates funds for infrastructure needs, the executive branch is charged with the implementation of these funds. If transactional federalism remains the “federalism du jour,” it is not a stretch of the imagination to foresee a scenario in which a president links the release of infrastructure funds, for example, in exchange for a promise that states will forbid local governments from adopting “sanctuary city” status for undocumented immigrants. While the ultimate constitutionality of such an action may be uncertain, such actions have the potential to cause significant disruptions and delays to infrastructure planning and construction.
Although change in intergovernmental relations takes place, throughout much of our history the change has been slow, measured, incremental, and predictable. The slow pace of change allows time for governments to prepare accordingly, and to assimilate the change into long-standing organizational routines and processes. The incremental nature of the change allows for careful planning—a critical element of successful infrastructure projects. If transactional federalism continues unabated, long-term infrastructure planning becomes an exercise in futility.
The nature of infrastructure projects—large, expensive, and complex—means that states cannot meet their infrastructure needs alone. Moreover, most infrastructure provides benefits that go well beyond state borders: a new highway bridge is used by anyone traveling that road, not just citizens of the state. A wastewater treatment plant in Minnesota that discharges treated effluent into the Mississippi River does not just affect residents of Minnesota, but all citizens downstream in the watershed to the Gulf of Mexico. Another important element of some infrastructure is that it can be the result of national policy goals and their accompanying rules, regulations, and compliance standards. Even wealthy states might balk at the expense of an unfunded mandate; federal infrastructure programs are designed to help states pay the costs of these mandates. If national policy goals matter, then the ability of our system of intergovernmental relationships must allow for fair, equitable, transparent, and predictable processes. Treating these relationships as a series of transactions in a marketplace is antithetical to these underlying values, resulting in inequities and inefficiencies.
Conclusion
The COVID-19 pandemic has laid bare the tensions inherent in federal-state-local relationships in the U.S., compounded by an implicit redefinition of federalism by the current administration, and coupled with a lack of leadership and vision. As detailed in this collection of commentaries, the effects of the pandemic reach well beyond short-term economic and health issues; the effects of the pandemic will have a long-term effect on the nation’s ability to build and maintain its core infrastructure. This is a challenge that is greater than any one government (or level of government). It will require a carefully planned and coordinated effort to address the tasks that lay ahead. If the nation’s infrastructure is important and worthy of government attention, and the efficient use of the nation’s scarce resources matters, then an intergovernmental system that works for the best outcomes of all citizens of all states—not just those either in favor or better positioned to compete—becomes imperative. Indeed, in order to make our federal system of government an effective one, leaders must be deliberate in overcoming the hyper-partisan environment in the pursuit of growth and progress.
With large-scale infrastructure policy back on the national policy agenda, the importance of federal-state-local relationships cannot be overstated. How those relationships are structured, and how scarce resources are allocated, are critical elements that will largely determine the ultimate effectiveness of any national infrastructure program. If the desire is to “lift all boats,” national leaders must have an understanding of federalism that enhances collective benefits and espouses the regime values of our nation. Failure to do this will bring Choate and Walter’s (1983) dire predictions that much closer to reality.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.