HISTORICAL CAUSE OF GOVERNMENT BUREAUCRACY

May 23, 2007

In recent years, members of Congress have inserted thousands of pork-barrel spending projects into bills to reward interests in their home states.  But such parochial pork is only a small part of a broader problem of rising federal spending on traditionally state and local activities, says Chris Edwards, director of tax policy studies at the Cato Institute.

Consider:

  • Federal spending on aid to the states increased from $286 billion in fiscal 2000 to an estimated $449 billion in fiscal 2007 and is the third-largest item in the federal budget after Social Security and national defense.
  • The number of different aid programs for the states soared from 463 in 1990, to 653 in 2000, to 814 by 2006.

The theory behind aid to the states is that federal policymakers can design and operate programs in the national interest to efficiently solve local problems, says Edwards:

  • In practice, most federal politicians are not inclined to pursue broad, national goals; they are consumed by the competitive scramble to secure subsidies for their states.
  • At the same time, federal aid stimulates overspending by the states, requires large bureaucracies to administer, and comes with a web of complex regulations that limit state flexibility.

By involving all levels of government in just about every policy area, the aid system creates a lack of accountability, says Edwards.  When every government is responsible for an activity, no government is responsible, as was evident in the aftermath of Hurricane Katrina.  The system desperately needs to be scaled back from the interlocking interests that block reform, including elected officials at three levels of government, armies of government employees and thousands of trade associations representing the recipients of aid.

Source: Chris Edwards, "Federal Aid to the States: Historical Cause of Government Growth and Bureaucracy," Cato Institute, May 22, 2007.

For text:

http://www.cato.org/pub_display.php?pub_id=8246

For Policy Analysis:

http://www.cato.org/pubs/pas/pa593.pdf 

 

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