Why ‘Wards of Washington’ Don’t Work Well

Red states can justifiably ask whether federal grants are truly benefiting them

Letter to The WSJ. 

"Regarding “Republican States Are ‘Wards of Washington’” (Letters, Feb. 12): Jeffrey Sonnenfeld and Stephen Henriques note that taxes raised in wealthy blue states help subsidize red states’ budgets. The subtext: Republicans shouldn’t complain about Democrats’ profligacy with federal grants.

But red states can justifiably ask whether such grants are truly benefiting them. Even with some revenue transfers between states, federal grant money is largely raised from taxes on citizens in the same states that receive it. In practice the federal government taxes state residents, routes the money through Washington, takes a cut off of the top for the federal bureaucracy and returns the sum to states with restrictions on how they can spend it.

From any logical viewpoint this is a bad way to run a federal system. In 2022 more than $1 trillion, or more than 35% of all state revenue, came from the federal government. More budget-conscious red states would tax and spend far less in a system less reliant on these grants. They would also impose more requirements about work or personal contributions for welfare programs, which are often refused by the same Washington bureaucracy that approves expansions of such programs in blue states. Even if a state receives a certain amount of federal dollars, that doesn’t mean those are the sorts of dollars for the sorts of programs they want.

In a system where states were true laboratories of democracy, they could use their own residents’ funds to craft their own health, transportation, education and welfare systems. These would doubtless be less costly than the federally funded ones. But for some reason Washington thinks that the further away the political representatives and the bureaucracy, the wiser the government will be in dictating the terms of these programs. This is incorrect, and representatives in both red and blue states know it.

Judge Glock

Manhattan Institute"