State vs. Federal Power
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ELIZABETH FARNSWORTH: Although Congress has averted another government shutdown, there still is no agreement on a balanced budget. That drive has stalled for now partly because Republicans in the administration did not bridge certain fundamental differences. One of those involved how often and when to use block grants to states as substitutes for formerly federal program like welfare or Medicaid. We get four perspectives from one state now on block grants. Tommy Thompson is the Republican governor of Wisconsin. Paul Soglin is the Democrat mayor of Madison. Scott Klug is a Republican who represents Wisconsin’s second congressional district which includes Madison. Tom Barrett is a Democrat from the fifth district, which includes parts of Milwaukee. Thank you all for being with us. Gov. Thompson, you’ve been one of the driving forces behind the whole idea of block grants. Make the case for us. Why is this such a big part of what was called the Republican revolution?
GOV. TOMMY THOMPSON, (R) Wisconsin: (Madison) I can only give you as an example of what we’ve been able to do in Wisconsin. We’ve had to go to Washington 175 times in order to get waivers and in order to do things in welfare reform and in Medicaid. In Wisconsin we’ve been able to use those waivers to try something new, and as a result, we’ve been able to reduce our welfare caseload in Wisconsin by 33 percent, probably more than any other state in the nation. And in Medicaid, we’ve been able to use block grants for using managed care. We started managed care on Medicaid, and as a result of that, we’re saving money, saving the federal government money, saving the state money, and offering better health services and better hope for those people on welfare. That’s why block grants give us as governors the opportunity, the flexibility to be innovative, more efficient, and to allow us to do better jobs for our citizens.
ELIZABETH FARNSWORTH: And you think that you are more capable of doing this in Wisconsin because you’re closer to the scene, you’re there?
GOV. THOMPSON: Oh, there’s no question about it. And you got to realize the one-size-fits-all concept that Washington is noted for just doesn’t do it because there are differences between Wisconsin and Illinois and Florida and Washington and California. And what you need is you need the flexibility at the state level so governors from California to Florida to Texas to Maine and Wisconsin are able to come up with innovative programs in these areas and be able to deliver more efficient services. And we would like to be able to expand Medicaid to the working poor. We can’t do that under the existing system. We would like to be able to offer a service that’s going to have co-pays and allow people that are working poor, that are not on welfare, but be able to buy into our system and get medical coverage. We can’t do that under the existing system. With a block grant, we would be able to.
ELIZABETH FARNSWORTH: Okay. Before we get a response to this, Congressman Klug, do you have anything to add to this, the case for block grants?
REP. SCOTT KLUG, (R) Wisconsin: Well, I think one big case to be made for block grants are the potential savings here in Washington, and let me just give you a couple of numbers. There was a GAO study in 1995 that said there were 600 separate federal programs assisting states and local governments, 150 for job training, 77 for education, more than 200 for welfare. For example, in the area of employment training, the GAO found 163 separate federal programs administered by 15 departments which cost more than $20 billion. So I think what you can do is bundle these all up together and send them back to the states and give them the discretion to spend the money they wanted. Let me give you an example of one other quick example, and that’s children’s vaccine programs. We set up a new entitlement program here several years ago, the Clinton administration did, which a number of Democrats, including Sen. Dale Bumpers, were vehemently opposed to because what we did is to say the federal government is going to buy vaccines and ship ’em back to Wisconsin and other states across the country. If you talk to anybody involved in the health services in Wisconsin, they’ll say we don’t need vaccines, what we need is money so we can keep clinics open longer and hire more public health nurses and send vans around the neighborhoods, and maybe in a few cases spend money on vaccines, themselves, so I think what you get is more flexibility to the states, the ability of states, as the governor said, to tailor individual programs, and frankly, you get savings, because in many cases, every one of those programs that’s run through Washington comes with a bureaucracy and a file cabinet and a desk drawer and all kinds of overhead that we can eliminate and just give to Wisconsin, or give to the city of Madison to spend.
ELIZABETH FARNSWORTH: Okay. Mayor Soglin, as mayor of a city, Madison, which has how many thousand people now–
MAYOR PAUL SOGLIN, Madison, Wisconsin: We’re a little over 200,000 now.
ELIZABETH FARNSWORTH: Okay. Why not have block grants?
MAYOR SOGLIN: Well, let’s start out with both the comments of the governor and the congressman and realize that what they’ve identified are problems that can be solved without the block grants. The governor I think makes a very good case for my position in saying that he has received the waivers, but there are some other social values, there are some other economic values–
ELIZABETH FARNSWORTH: What you’re saying here is that the governor, if he wants to experiment, he can get waivers from the federal government to do what he wants to in a state?
MAYOR SOGLIN: And done it very effectively. But what we need to remember is this. If we start a system which is the one recommended, we’re going to see what we call a race for the bottom. We’re going to see a race as state after state changes requirements, changes eligibility and becomes more draconian in their dealing with the problem. The, the situation recently when Michigan made changes is reflective of that, as folks moved over to Minnesota. The other thing we have to keep in mind in regards to the, the whole Medicaid issue is we’ve always fundamentally said there’s going to be a basic level of health service for the American people. We’re going to guarantee that, and this guarantee evaporates with this block grant into the states. What we see happening, or what we envision happening if the block grant takes place, is a system whereby there will be different standards in each state and, for example, some of the things that have worked in Wisconsin, such as the commitment that the states made under the governor for child care, for transportation, for job training, and job creation, those aren’t guarantees as each state is given its own flexibility, its own independence, and, therefore, we’re going to see really a skewered system.
ELIZABETH FARNSWORTH: Okay. Congressman Barrett, do you have anything to add to that?
REP. TOM BARRETT, (D) Wisconsin: (Capitol Hill) Well, I think Mayor Soglin made a good argument as to why we shouldn’t move away from the block grants, in particular from Medicaid. All four of us are familiar with the perceived problem, a real problem for some in the last decade, where people from other states that had higher welfare benefits, for example, moved to the state of Wisconsin. The legislature and the governor acted to stop that because we did not want to become a magnet for other states where their benefits were lower than those in the state of Wisconsin. So if we lower the benefits or take away that safety net altogether, I agree with the mayor, you’re going to see a race to the bottom, and you will have some states that will try to remove any type of protections at all, and encourage their people to move to states like Wisconsin that have had a history of doing a good job. I think the governor’s comments that he has received 175 waivers shows that the Clinton administration is open to experimentation. The fact that he has received those waivers I think shows two things: It shows first of all that they’re willing to listen to those states that are making a case for trying new things, but second, it also shows that that safety net needn’t be removed, because if Wisconsin and other states that are so above that basic level are not in the least big hampered by that basic level, we’re not hurting anybody; we’re not–we’re not causing any harm by having that safety net there. I’m afraid if you take away that safety net for the first time in decades, you’re going to have poorer people in this country who aren’t going to have that basic guarantee, and if you have a situation or an economy in a particular part of the country go sour, you might have a situation where they simply run out of money. And I think that we have to have more flexibility absolutely for the states, but at the same time, we have to make sure that the people have at least a safety net. Very quickly on block grants for programs like law enforcement, when we had the law enforcement block grants two or three decades ago under President Nixon, one of the things that Sen. Proxmire, again a politician all four of us are familiar with, gave one of his famous Golden Fleece awards to was some of this money was used for a $27,000 study as to why prisoners wanted to escape from prison. I don’t think we want to go back to those open-ended block grants, and I think by targeting the money to those areas where they’re needed I think makes sense.
ELIZABETH FARNSWORTH: Okay. Gov. Thompson, two questions. First of all, what about the race to the bottom that you’re hearing about here?
GOV. THOMPSON: Well, that’s just not true, and I think if you would ask the mayor and the congressman who are opposed to my position on block grants, they would say that they never have to worry about Wisconsin. Wisconsin is doing an excellent job. Our benefits are very high, and they know full well that we would not have a race to the bottom, but I think there’s a bigger question. I think something should be laid on the table here. I’m negotiating right now with three Democratic governors and two other Republican governors, and we came into this negotiations, we were not making any progress, when we were using the words entitlement and block grant, so we made an agreement amongst ourselves not to use those words, those buzz words which polarize and cause partisan differences, and–
ELIZABETH FARNSWORTH: You’re negotiating about–
GOV. THOMPSON: Now–
ELIZABETH FARNSWORTH: Describe what you’re negotiating about. You’re negotiating about Medicaid, right?
GOV. THOMPSON: Medicaid, right, for the national government. At the–under the auspices of the White House and the leadership in the Congress, and we’re making a great deal of progress right now because we’re not using those buzz words. We’re developing a system that’s more user friendly, more flexible for the states, allowing for some general guidelines and guarantees, and we think we can develop a program without the buzz words, and once you use the buzz words, you immediately have people dividing up. And I think we should get beyond that and develop a system that’s going to give states more flexibility, allow some broad guidelines in which we have to meet as states, and I think we can do it, and I think we could come out of this on a bipartisan basis. I would throw that out to the Congressman.
ELIZABETH FARNSWORTH: Okay.
REP. BARRETT: Let me say that I was encouraged when I saw the report say that you did have three governors from each party doing that, because I think the governor is moving in the right direction. You have to have that basic protection of a safety net. But at the same time, the governors are correct; that they should have more flexibility so that they don’t have to come to Washington every single time they want to make a change in a program. But I think the point that those of us in Congress had said is you simply can’t take away that safety net altogether. That’s just not acceptable to many of us in Congress.
ELIZABETH FARNSWORTH: Okay. I want to come back to the negotiating in a minute, Governor.
GOV. THOMPSON: Sure.
ELIZABETH FARNSWORTH: But part of the reason that you’re–that this negotiating is happening the way it is is because of the impasse so far on block grants, and I want to get clear why that impasse happened. Could you just quickly give us a couple of examples of programs that you think have worked very well, very briefly, in Wisconsin that have involved innovative, something you’ve done that’s been particularly innovative.
GOV. THOMPSON: Well, I think our Children First program in which we got a waiver under the Bush administration, and we’ve been able to increase the amount of child support we’ve been able to collect from fathers, usually fathers that have not really done a good job in paying their child support. We’ve been able to set up some other programs that have been able to get mothers off of welfare, and give them more hope and more training, and we’ve been able to do this. The Job Trainings Bill is a prime example there. I believe Congressman Klug said there was about 150 different variations. If we can get that down and make it more flexible and put it all consolidated into a jobs department, we can serve more people with less money and still meet some of the guidelines that are set down by Congress. If they’re general guidelines that are held, we can be held accountable but we can do a better job of implementing the programs at the state level.
ELIZABETH FARNSWORTH: Okay. Can the states do a better job? What happens in your city that shows that they can’t?
MAYOR SOGLIN: Okay. It depends on the specific state administration, and that’s the whole point. For example, so long as we have a state legislature or a state government that in one particular area is prepared to maintain quality child care, transportation, job training, and job development, then it’ll work. But you don’t have a guarantee that one administration following another will do that, and you don’t have a guarantee that local economic or regional economic conditions are going to change those factors and change the mix.
ELIZABETH FARNSWORTH: Well, then you’ve said that cities suffer the most under this. Why is that?
MAYOR SOGLIN: Well, let me–
ELIZABETH FARNSWORTH: Okay, go ahead.
MAYOR SOGLIN: Let me start and come to that.
ELIZABETH FARNSWORTH: Okay.
MAYOR SOGLIN: In this whole debate, in this whole discussion which started three, four years ago. When we talked about the federal mandates, for example, on one as far as I know said a federal mandate is the same as the disengagement of the federal government from our lives. The federal government has a role in setting national standards and national minimums. Otherwise, we get the race to the bottom. Look at the community development block grant. Yeah, it works. The community development block grant has been around for 20 years. The block grant program is based partially on population, partially on need, and–
ELIZABETH FARNSWORTH: Administered by HUD, right?
MAYOR SOGLIN: It is administered by HUD. There is no additional bureaucracy in the middle, and it is a program that sets certain national goals so that we’re all working towards the same end, so that we don’t have fragmentation, so that we don’t have an absence of purpose. If we start block-granting these programs to the states, I mean, the governor knows full well that people in his own party in his last session of the legislature made it quite clear that there were a sufficient number of Republicans in the state assembly who were vindictive and mean-spirited in terms of dealing with Wisconsin that we lost funding, we were punished because folks didn’t like us, and we will be subject to that kind of I could best describe it as whim, and so will other cities around the country.
ELIZABETH FARNSWORTH: You’re saying that block-granting gives state legislatures too much power and not enough regulation and when it’s in the federal system, there at least is something quite consistent?
MAYOR SOGLIN: As bad as the federal system may be, it’s far superior to the type of, of shall we say impulsive and in some cases vindictive actions by legislatures.
ELIZABETH FARNSWORTH: Okay. Congressman Klug, what do you think about that?
REP. KLUG: I think that’s exactly the same case here. Congress has been very bit of capricious and that the one reason that Gov. Thompson and Gov. Engler, Bill Weld out in Massachusetts, Pete Wilson in California have had such a difficult time creating innovative programs is because of the mandates Washington puts on top of them; 60 cents out of every dollar in Medicaid is already spent by federal mandates before it gets to individual states. And I guess I disagree with the fundamental assumption that somehow if you put this in the hands of the legislature and the governor, it’s going to be a race to the bottom. To the contrary, one of the larger fights we’ve had now in terms of block grants is to figure out the formulas that go back to the state and to create a formula frankly that rewards low cost, innovative states like Wisconsin. We run our welfare program very efficiently. We run our Medicare and Medicaid system very efficiently because we’ve been very aggressive in terms of using managed care. So I think frankly if you look at Wisconsin, given the flexibility, we can run a program more intelligently and more cheaply than Washington can design without all kinds of bureaucracy, without kinds of fingerprints, and you don’t have to wait–some states have waited, like Texas, like California, for three and four years for approval for Washington to try something I think the legislature, the governor, the mayor and the city council should have a right to do in the first place.
ELIZABETH FARNSWORTH: Mayor.
MAYOR SOGLIN: Well, all I can tell the Congressman is to remind him that in the last six or seven years Wisconsin’s per capita expenditures compared to the rest of the state went from above average to 11 percent below average and our reward for it is continual punishment of higher taxes on a local basis and less of the state resources, and, and with that as a living example over the last half dozen years, I don’t know how he expects me to believe it’s going to be any different when there’s even more resources to add to the state kitty in terms of the federal funds.
ELIZABETH FARNSWORTH: Okay. Congressman Barrett, on this general question of whether state legislatures are more in touch, you’ve been a state legislator, and now you’re in Congress, what do you have to say about that?
REP. BARRETT: Well, I can remember my days in the state legislature coming from Milwaukee, where there was basically a block grant from the state to Milwaukee County dealing with juvenile crime, and we used to argue for more money all the time in order to get, in order to get sufficient funding from the state. We used to joke it’s not like we have to–these kids are hired to commit crimes so we can get money from the state, so I don’t know that the block grant magic works particularly well. I also think that sometimes the states go overboard in claiming that they are lovers of local control because in Wisconsin, as both the governor and the mayor know, the state legislature just passed a law that took away local government’s abilities to regulate guns and also to regulate pesticides, so I think what this comes down to, when you strip away all the fancy words is who’s holding the power, and I understand where the governors want to hold the power. I understand where the mayors want to hold the power, I understand where Congress wants to make sure that there are basic safeguards, and they want that power. But I don’t–I am not convinced that the state does a particularly better job. Just another quick example–
ELIZABETH FARNSWORTH: Let me interrupt you one second. I want to go over to Gov. Thompson here for–on this question of the Clinton negotiations.
GOV. THOMPSON: Yes.
ELIZABETH FARNSWORTH: These are negotiations since the Medicaid bill is stalled, the Medicaid is part of the whole–
GOV. THOMPSON: It is probably the most difficult, it is probably the most difficult one to solve.
ELIZABETH FARNSWORTH: You’re trying to fashion now something which might go, right, and have you backed off? You said you’re not using the words block grant, but are you–have you backed off the concept of block grants?
GOV. THOMPSON: Well, the concept of block grants is more flexibility, and more ability to try innovative things. We haven’t, we haven’t backed away from that. We just don’t use the buzz words. What we’re trying to do on a bipartisan basis, and we’re not only dealing with governors, yesterday I had the privilege of meeting with 22 Republican and Democrat U.S. Senators, 11 from each political party, and they also were encouraged by what we were able to accomplish, so if you get away from the nomenclature of block grants and entitlements and guarantees and put out there what you really want to do to administer programs and give some national standards which governors have to comply and be held accountable to or towards, I think we can develop a plan that is going to be one that’s acceptable on a bipartisan basis through Congress. Everybody, I believe, realizes there’s just too many rules and regulations. To give you an example, Oprah 87, dealing with nursing homes, is a statutory bill that has five pages, but it has 15,000 rules and regulations. Now those 15,000 rules and regulations, I don’t even think Tom Barrett would say that you need all of them, and he is certainly on the opposite end of the spectrum from me. I think we need more flexibility, we can develop a better program, and I think what we both have to do, both sides, Republicans and Democrats, have got to develop new nomenclature, new words to describe what we’re trying to do. And once that’s done, I think we’ve gone a long ways towards solving this problem.
ELIZABETH FARNSWORTH: Thank you, Governor, and thank you all for being with us.