Unfunded Mandates Reform Act: 1996 and beyond.
UMRA was widely praised by intergovernmental officials and students of federalism alike as a responsible attempt to institutionalize congressional self-restraint on mandates. Instead of automatic prohibitions or reimbursement dictates, the act adopted what several analysts dubbed a "stop, look, and listen" approach to mandates.(2) Any mandate with an uncompensated state and local cost greater than $50 million a year net of savings and direct federal funding, as determined by the Congressional Budget Office (CBO), could be stopped by a point of order raised on the House or Senate floor. A majority of the membership can override the point of order and pass the mandate, but at least the provision ensures the potential for a debate about the issue of mandating itself. Congressional actions covered include direct orders requiring additional state and local spending, provisions preempting state and local revenue sources, and reductions in authorizations for federal aid defraying state and local compliance costs for existing mandates.
Certain types of mandates are excluded from UMRA, including those preventing discrimination, conditions of grants, and preemptions of state and local authority to regulate or provide services that do not carry state or local fiscal implications. Of the four types of intergovernmental mandates identified by the U.S. Advisory Commission for Intergovernmental Relations (ACIR), only direct orders - perhaps the most intrusive - are covered, while three - crosscutting requirements, crossover sanctions and partial preemptions - are exempt from UMRA.(3) However, new grant conditions or funding caps for eleven entitlement grant programs, such as Medicaid, are also defined as mandates under the act if state and local governments lack authority to adjust to these changes.(4)
The CBO was given a central role in helping Congress implement UMRA. Although CBO had been doing state and local cost estimates since 1981 under earlier legislation, UMRA prompted CBO to create a separate unit devoted exclusively to state and local cost estimates, staffed by seven persons. Although differing with CBO on specific cost-estimation issues, state and local groups overall give CBO positive evaluations for its first year's performance.
Although passage of the legislation occasioned high expectations, the act is not designed to be self-executing. Experience with points of order in the congressional budget process suggests that they can be useful when they serve the interests of a congressional majority but are often ignored when they do not. That is to be expected because, by their very nature, points of order are designed to promote accountability for certain decisions, not to block those decisions. The effectiveness of UMRA would, thus, ultimately rest with the commitment within the Congress itself to sustain the Act's objectives of self-restraint because there is very little about the new process that is automatic. First, a member of Congress must formally raise a point of order to trigger the act's presumption that covered unfunded mandates are out of order. These mandate opponents must then muster a majority in one chamber to sustain the point of order if it is challenged, thereby preventing further congressional consideration of the mandate. Previous studies of the politics of mandates illustrate how compelling many proposed mandates can be, particularly when defined by advocates as valence issues where costs are not perceived as legitimate issues.(5) However, past may not be prologue.
The first year (1996) of UMRA's implementation may provide the most favorable test for the act. The same Congress that originally passed the law could be expected to be vigilant in applying the act's protections against new mandates. More important, the 104th Congress came to Washington, D.C. pledged to turn over a new federalism leaf and did indeed raise fundamental new issues about the federal role in domestic policy. Republican governors were welcomed into the inner policy circles of the congressional leadership and had a major role in crafting early 1995 plans to block grant more than 70 percent of federal assistance to state and local governments.(6) State and local governments showed a unified and intense lobbying presence in gaining passage of UMRA itself.(7) Indeed, these two key variables - party as well as state and local interest-group support - will be critical in determining whether the general support for mandate reform translates into victories on individual mandates.
We would expect, then, that at least for this one year, the act would serve as a deterrent in preventing congressional consideration of mandates proposed by advocates or as the spur to provide federal funding for whatever mandates are adopted. This article will focus on congressional activity on mandates during 1996 and assess how UMRA interacted with other political variables to affect congressional consideration of mandates. It will address not only mandates covered by the act, but those exempt from the Act as well to gain a comprehensive view of congressional action.
OVERVIEW OF MANDATES ENACTED IN 1996
The only systematic inventory of mandates covered by UMRA is prepared by CBO, pursuant to its responsibilities under the act. CBO tracks bills it provides estimates for, generally at the committee report stage. CBO's inventory generally counts each estimate for all relevant bills reported by committees during the legislative process, both in the House and in the Senate, which includes bills that may never become law.(8) For 1996, CBO's tally indicates that, when compared to the total number of intergovernmental mandate estimates it provided, the number of significant mandates exceeding the $50 million threshold in UMRA were quite small (Table 1).
Table 1 Congressional Budget Office Mandate Statements, 1996 Total estimates prepared 718 Estimates identifying mandates 69 Mandates exceeding $50 million 11 Mandates that could not be estimated 6 Source: Congressional Budget Office, The Experience of the Congressional Budget Office During the First Year of the Unfunded Mandates Reform Act (Washington, D.C.: CBO, 1997), p. 5. The data refer to CBO estimates transmitted to the Congress on bills defined as intergovernmental mandates by UMRA.
The eleven bills exceeding the $50 million UMRA threshold addressed five distinct mandates: (1) minimum wage increase; (2) parity for mental health in health insurance; (3) preemption of state securities fees; (4) mandated use of Social Security numbers on driver's licenses; and (5) extension of federal occupational safety and health to state and local employees. According to CBO, four of these mandates were passed, but only one - the increase in the minimum wage - exceeded the $50 million UMRA threshold once it was considered on the floor. The others were modified to reduce their costs.
At first examination, the CBO data would suggest that, at least with regard to major mandates covered under UMRA, 1996 was a year of restraint for the Congress, as could be expected. How does this compare with previous years? The author has analyzed the major mandates listed in the ACIR study on intergovernmental regulation in the 1980s, supplemented by additional major mandates estimated by CBO and preemptions not included in ACIR's scope.(9) Of the thirty-one major mandates passed between 1983 and 1990 - the era in which ACIR describes as witnessing a resurgence of major mandates surpassing even that of the 1970s - fifteen would probably be covered by UMRA's definition of a mandate, or an average of two covered major mandates passed per year during that period. It is likely, however, that this listing does not capture additional mandates passed exceeding the $50 million threshold which nevertheless were not considered significant using ACIR or CBO criteria at the time.(10) Therefore, when defined by the UMRA criteria, major mandates in earlier periods passed somewhat more frequently than in 1996, although the differences in pace are not striking.
This overall indicator, however, of UMRA-defined mandate activity in 1996 obscures other important mandating activity First, the indicator excludes the passage of mandates not covered by UMRA, such as laws protecting against discrimination and grant conditions. CBO identified more than seventy-five additional bills reported by committees in 1996 that would impose increased costs to state and local governments, primarily grant conditions. Preemptions of state and local authority not imposing additional direct state or local costs are also excluded. Moreover, because CBO estimates record the net costs of mandates, major mandates contained within legislation that have offsetting mandate savings for the state and local sector, such as welfare reform, also are not included.
IMPACT OF UMRA ON MANDATES
What influence did UMRA have on legislative mandate decisions? This is a difficult question to answer because the factors responsible for legislative outcomes are intertwined and covariant. Congressional mandate decisions were most assuredly a product of both the UMRA mechanism and the various political forces active in the Congress in 1996. Certainly among these political forces was the commitment by many in the Republican majority to reduce the intrusiveness of the federal government's role in the intergovernmental system. The 1996 experience suggests that this general political commitment and UMRA itself were mutually reinforcing and were principally responsible for whatever mandate restraint occurred during the congressional term.
The design of UMRA would suggest that mandate opponents would rely on the point of order to stop the passage of major mandates. However, the point of order was raised only a few times during the year. Congressional opponents of the minimum wage hike used it unsuccessfully two times in the House, as House majorities voted to override the point of order to consider and subsequently pass the mandate. Minimum wage advocates accused opponents of cynically using the unfunded mandate vehicle in a dilatory fashion to gridlock the House when their objections had little to do with intergovernmental concerns.
The primary impact of UMRA, however, came not from blocking legislation, but rather from UMRA's effect as a deterrent to mandates during the drafting and early consideration of legislation. Sponsors of legislation feared that their carefully crafted coalitions might fall apart, if faced with a point-of-order vote on the floor of either chamber. Accordingly, when learning of a CBO cost estimate that could be used to trigger a point of order, sponsors made significant modifications to bring the costs below the $50 million threshold. This occurred in three prominent cases.(11)
Telecommunications Reform. Years in the making, this massive bill deregulating the industry was pending in conference committee when UMRA went into effect in early 1996. State and local governments adroitly used the threat of a point of order to gain a seat at the table in conference deliberations. The bill appeared to preempt state and local taxes and fees coveting franchises and licenses given to cable and other communications companies. It also appeared to prohibit state and local authority over the zoning of communications infrastructure, including the siting of communications towers used in wireless communications. Sponsors, sensing a threat that could unravel their compromise, modified the legislation to mollify state and local governments sufficiently to avoid a point of order. Specifically, the legislation permitted state and local governments to continue tax and fee collections and steered clear of an absolute preemption of zoning and citing authority.
Immigration Reform. As part of his perennial immigration reform efforts, Senator Alan Simpson's (R-WY) initial bill would have required states to use social Security Numbers on driver's licenses to promote a more secure way for the public and private sectors to enforce prohibitions against illegal aliens' access to jobs or benefits. States were also required to adhere to new federal standards for issuing both birth certificates and drivers licenses that would limit tampering or counterfeiting. Because the new mandates would have been effective immediately, CBO estimated that the original bill would have cost states between $80 million and $200 million in the first year, clearly well above the UMRA threshold.(12) Concerned about the potential use of UMRA's point of order by those opposing the bill, Simpson modified the legislation to delay the phase in of the these mandates over a ten-year period, stretching out the state and local costs to a level below the threshold.
Securities Reform. This legislation responded to the interests of large national investment firms by preempting state regulatory authority over the registration of mutual funds and large investment advisors, transferring exclusive jurisdiction to the Securities and Exchange Commission (SEC). CBO estimated that the committee-reported bill would have increased state and local costs more than $125 million annually through the preemption of states' authority to collect certain fees from these entities.(13) The legislation was modified subsequently to preserve the states' collection of fees for a specified period while retaining preemption of states' regulatory programs.
In these cases, the point of order represented a credible threat because federalism issues associated with mandates had become an important concern to members of the Congress. In the conflict over what the conflict is about, the social problems or benefits addressed by proposed mandates became less politically compelling in these cases than the impacts of these initiatives on state and local authority and costs.
Against this backdrop, UMRA's point of order became a tool that raised the salience of the federalism issue in certain cases and threatened to embarrass mandate sponsors and supporters. Sponsors, moreover, feared that the point of order would become useful not only to state and local groups, but also to other interests and members of the Congress opposed to the legislation for other reasons. The new point of order enabled states and localities potentially to create new allies in the business community and elsewhere who opposed the legislation for other reasons. In general, successful coalition leaders must not only mobilize supporters, but also avoid prompting significant opposition that, even as a minority, could threaten to slow down the legislative process or arouse latent publics in ways that could embarrass the supporters at some future time. Much congressional scholarship, accordingly, suggests that risk-averse and consensus-seeking behavior characterize much legislative activity within the Congress.(14)
The March of Mandates Continues
The modifications reducing the costs of several mandates are certainly noteworthy, but such apparent state and local victories occurred in legislation that nevertheless succeeded in imposing substantial new mandates or preemptions on the state and local sector. Essentially, intergovernmental concessions were won not in deciding whether to mandate, but in how and when to mandate.
The securities legislation, for instance, although retaining states' authority to continue certain fees for a specified period, nevertheless constitutes significant preemption of state authority to register and regulate mutual funds and large investment advisors with assets over $25 million. The changes to the immigration reform bill reduced the near-term costs below the $50 million threshold by delaying the effective date of the mandate, but new federal mandates were nevertheless imposed for the first time on state-issued driver's licenses and birth certificates. The sponsors' circumvention of UMRA's thresholds in this case bears resemblance to comparable efforts to escape congressional budget constraints through the tailoring of proposals that only increase deficits beyond five- or ten-year budget scoring windows.
Similarly, the telecommunications legislation preempted major areas of state regulation of the industry, often in the name of industry deregulation. States were prohibited, for instance, from preventing the resale of local telephone companies. The Federal Communications Commission (FCC) acquired new authority, with state input, to define requirements for universal service, including deciding what services must be offered to schools and libraries, and states were prohibited from adopting conflicting service policies. States and localities were preempted from regulating cable technology, customer equipment, and "decency" standards for computer networks. Federal preemption occurred even in the zoning area, where state and local governments were preempted from regulating smaller satellite dishes or TV antennas. Local authority to regulate the siting of wireless transmission towers was constrained to ban absolute local prohibition of towers. The telecommunications reform act is currently the basis for a court case by cable companies to contest local franchises and fees for cable companies entering into telephone service. Their argument is that such local provisions cause a barrier to entry and competition.
In addition to these three laws, there were a number of other major new federal mandates and preemptions enacted in 1996. Some were covered by UMRA, and some were not. The data in this article used CBO's data base, information supplied by state and local governments, and a comprehensive review of the Congressional Quarterly Weekly Reports for the year to identify some additional areas where one or more new mandates or preemptions were enacted in 1996.
Minimum Wage. As noted earlier, this was the one mandate passed by the Congress that exceeded UMRA's threshold. Covering state and local and private employers alike, CBO estimated increased state and local costs at more than $1 billion over five years.(15)
Criminal Justice. A range of new federal initiatives were passed that impose new duties on the state and local sector. Some were direct orders, such as the requirement for states to amend their laws to require restitution to victims of international terrorism (P.L. 104-132), while others federalized additional crimes, such as interstate stalking (P.L. 104-201). Others of more consequence for local governments were enacted as conditions of aid for federal criminal justice grants, which excluded them from UMRA's purview. "Megan's Law" was enacted requiring state and local law-enforcement agencies to notify citizens when a sexual offender has been released to live in the community. Another provision requires states to test all prisoners and parolee for substance abuse pursuant to the U.S. Justice Department guidelines. The Congress also passed a new federal law banning the possession of guns in local schools.(16)
Health Care. Several preemptions and mandates were passed, most notably the Kassebaum-Kennedy legislation preventing health plans from denying coverage for preexisting conditions and extending continued coverage for workers losing or leaving jobs. States were given the option of enforcing the new requirements, but this legislation further extended new federal standards in an area traditionally under the purview of states. A requirement for minimum forty-eight hour hospital stays for mothers delivering babies preempted state laws regulating health care and will increase state costs under Medicaid. Other health requirements were imposed, such as a provision mandating states to require the testing of all newborns for HIV as a condition for receipt of Ryan White grants. Significantly, none of these health provisions is covered by UMRA, because they were enacted as part of appropriations bills or because they are conditions of aid.
Pesticides. After many years of controversy, Congress preempted state and local governments in regulating pesticides in the production, shipping. or handling of food (P.L. 104-170). Some states had exceeded federal standards for many years. This prompted the pesticides and food industries to seek a single federal standard.
Local Cost Sharing for Federal Water Projects. The Congress decided to increase the cost share for flood control projects conducted by the U.S. Corps of Engineers from 25 percent to 35 percent of costs (P.L. 104-303).
One of the continuing concerns about UMRA is that it does nothing about significant intergovernmental mandates already on the books, the ones that prompted Congress to pass UMRA in the first place.(17) The difficulties of changing existing mandates were illustrated by a 1996 draft report considered and rejected by the ACIR. The report recommending the modification of thirteen politically sensitive mandates, such as Davis Bacon and handicapped education, sparked a political firestorm that helped pave the way for ACIR's termination in late 1996.(18) Ironically, earlier commission reports endorsing broad sweeping changes in the federal system, including mandate reimbursement, received widespread support.(19)
Notwithstanding these obvious political obstacles, the 104th Congress did deregulate several important mandates. In November 1995, the Congress eliminated some of the most annoying highway grant conditions, including the federal speed limit, the mandate for states to use crumb rubber in highway reconstruction, the metric signage requirement, and the motorcycle helmet requirement. In 1996, the Congress passed safe-drinking water and welfare reform, two measures with significant deregulation provisions that promised to reduce state and local costs and increase state and local authority. Yet, both of these measures also included some significant new federal mandates.
In the case of safe drinking water, the 1996 drinking water reform provided important relief from some of the most burdensome regulations by slowing the pace of EPA regulations, giving the agency authority to consider costs in developing standards, and reducing monitoring requirements particularly for small communities. A new federal loan fund was provided to states to help communities obtain low-cost financing for compliance costs. However, new mandates were added requiring water systems to notify the public of contaminant levels and to require systems operators to comply with new certification provisions; CBO estimated annual costs to be between $30 million and $40 million.(20)
The welfare-reform bill has to be viewed as a mixed outcome from the mandate perspective. On the one hand, the block grant eliminated the federal entitlement to benefits and gave states major new authority to determine eligibility and payment levels. While the old open-ended matching programs penalized states that reduced benefits with a loss of federal matching funds, the new block grant provides a fixed grant and allows states to reduce their own funds to 75 percent of prior year's spending. In CBO's estimate, the repeal of existing mandates is likely to reduce state spending by more than the new mandates.(21)
Nevertheless, welfare reform introduced a host of new mandates. In addition to the five year cap on family eligibility and a variety of other limitations on recipients, states must place 50 percent of their welfare recipients in jobs by year 2002, a target which CBO estimates will cost $10 billion for such activities as child care and job training. With regard to immigrants, the new law bans welfare for new legal immigrants after which states are required to "deem" new legal immigrants before granting them welfare, requiring them to track down and consider their sponsors' income and resources in determining eligibility. State and local officials are also to report illegal aliens to the federal Immigration and Naturalization Service. Both provisions prompted New York City Mayor Guiliani to file court suits, charging that the new restrictions indirectly impose added costs because the city is required under state law to cover these persons under general assistance.
The child-support enforcement provisions of the new law mark a high point in the federal commandeering of state laws and bureaucracies to achieve national child-support goals. States are essentially directed to track new hires by employers, match them against parents with child-support orders, and then obtain and process withholdings of support payments from employers. Moreover, states are required to suspend driver's and other occupational licenses of individuals overdue in support payments. Because states would realize savings from increased collections and federal payments for installing tracking systems, CBO indicates that the changes will actually produce net savings to states of more than $1.5 billion over five years.
THE POLITICS OF FEDERAL MANDATES
The congressional commitment and heightened state and local interest-group attention to mandate issues bore some fruit in the initial passage of UMRA and the subsequent modification of major proposed mandates. Nevertheless, the Congress in 1996 passed major costs or authority limitations on the state and local sector. To assess whether the mandate restraints embodied by UMRA will be sustainable over the longer term, it is important to understands what forces prompted the passage of mandates.
Research on the politics of federal mandates in prior years reveals that mandates were an outgrowth of fundamental changes in the nature of the policymaking process.(22) Significant changes in political parties, interest-group formation, and the Congress itself enabled mandates to emerge as a major tool of national policy. Disconnected from traditional moorings in state and local party organizations, congressional candidates became policy entrepreneurs to gain electoral visibility, prompting members to embrace new policy proposals in their search for higher national policy profiles.(23) The Congress changed its institutional structures and mores to open more opportunities for all members to assert policy leadership. The cost of interest-group formation declined, opening up the system to a broader range of ideas and interests, particularly those representing publics likely to gain from regulatory programs.(24) The growing concentration of media in Washington, D.C. created a new resource for congressional entrepreneurs, interest groups, and other idea merchants to expand the scope of conflict and gain new footholds on the government agenda.(25) Policy areas, once conceived as iron triangles, were transformed into more fluid and open policy communities or issue networks.(26) Government itself became an engine of governmental growth, as programs created clientele and bureaucracies with an interest in expansion. Finally, the chronic federal budget deficits of the past twenty-five years have also influenced the growing reliance on mandates as a tool of federal action.
At the same time that these forces bolstered mandate advocates, traditional restraints on congressional regulatory activity appeared to erode. The underlying electoral ties that used to bind state, local, and national officials in strong political alliances were severed, replaced by a competitive or even antagonistic relationship between independent political entrepreneurs in search of public visibility. Daniel J. Elazar has observed that as the Congress became detached from state and local politicians, it also became distinctly unfriendly to the institutional interests of state and local governments.(27) Allegiance to federalism as a decision rule which prompted Congress in the past to exempt states from such mandates as Fair Labor Standards and Occupational Safety and Health, waned as more specific policy goals often took precedence, even for Republicans and conservatives, traditionally viewed as bulwarks against federal activism.(28)
The consequences for Congressional action were profound, and resulted in the kinds of mandates that led to passage of UMRA. The experience of 1996 reveals that three political forces responsible for many of the earlier mandates continue to prompt new mandates: valence politics, partisan politics, and interest-group politics.
In many cases, congressional entrepreneurs and interest groups adroitly define mandate goals in valence terms where only the benefits supported by the mandate are perceived to be legitimate.(29) These proposals which appeared at the time to be unassailable, were ushered in on a wave of enthusiasm that state and local governments and others in the Congress were obliged to support.(30) Significant and costly mandates passed during that period received consensual support at most stages of the congressional process.(31)
Several mandates passed in 1996 illustrate how mandates continue to be defined in valence terms, fueled by extensive media coverage of issues. For instance, Megan's Law was passed following the tragic slaying of young Megan Kanka by a released sex offender living near her home in New Jersey. Following extensive national media coverage, the bill mandating state and local law-enforcement notification to communities of released sexual offenders was championed and introduced by Congressman Richard Zimmer, a conservative Republican from New Jersey. Neither members who fashioned themselves as protectors of UMRA nor members who had civil liberties qualms about the bill felt they could vote against it, permitting the bill to pass quickly and by acclamation. Defined in symbolic and valence terms, objections were not politically in order.
The drug testing of state and local prisoners and paroles was also defined opportunistically by political entrepreneurs in valence terms that enabled quick and consensual adoption. In this case, President Bill Clinton conceived of the proposal during his 1996 campaign as a way to counter Senator Robert Dole's criticism of the effectiveness of his antidrug programs. The proposal was announced on 11 September 1996, attached to an omnibus appropriations bill, and it passed three weeks later.(32) Congressional Republicans were outflanked by the way the issue was defined, and opposition would have enabled the president to suggest that it was they, not he, who was soft on drugs.
Potentially, mandate reform and relief can also be defined in valence terms, as the lines of conflict are redefined from the benefit to the cost side of the policy equation. In these cases, the reduction of state and local costs and burdens could take on the character of a politically unassailable idea. In 1996, the burdens of EPA's safe drinking water standards on thousands of smaller communities made the regulatory relief in the 1996 bill politically compelling. Although environmentalists were able to gain several new mandates thanks to their new-found leverage with the House Republican leadership, the fact that they were forced to support the overall measure containing significant regulatory relief illustrated how compelling this idea had become. Once the political bargain was struck, the bill received unanimous support through the Congress.
Some mandates were proposed as tools to achieve partisan agendas and, as such, proved to be more contentious. However, no one party emerged as a consistent protector of state and local governments against mandates and preemptions. Rather, each party supported different mandates to implement its own policy prescriptions. If it ever was a defining source of cleavage between the two parties, mandates as a tool of government no longer constitute a stable basis for partisan division. Although Republicans championed the enactment of UMRA in 1995, the votes on specific mandates were driven more by the underlying policy goal supported by the mandate rather than by the federalism issues posed by the mandate tool.
The author reviewed all 1996 roll calls in both the House and the Senate and included those involving mandate and preemption issues that prompted a division of at least 20 percent among members. Of the fifty roll calls judged to involve mandate or preemption issues, forty-two were party votes where a majority of one party opposed a majority of the other party. For all fifty roll calls, majorities of both Republicans and Democrats supported federal mandates and preemptions 54 percent of the time.
[TABULAR DATA FOR TABLE 2 OMITTED]
If, in fact, mandate voting is driven by underlying policy goals, then this seemingly counter-intuitive result can be explained when the roll calls are disaggregated by policy dimension. The results in Table 2 show that Republicans supported mandates to achieve national welfare, moral policy, immigration, and business preemption goals. Democrats supported mandates to support the party's labor and housing agendas. The seemingly greater Republican support for mandates is a reflection of the greater number of divisive roll calls on proposed mandates favored by Republicans.
Immigration reform offers a good example of the primacy of programmatic policy issues. Republicans supported greater restrictions on states to prohibit welfare for legal immigrants, but supported regulatory flexibility to enable states to exclude illegal aliens from public education. These Republican immigration positions illustrate how mandates are a secondary voting dimension that calls forth support when it advances the party's more primary policy objectives on immigration and provokes opposition when it detracts from the party's policy goals.
These findings are similar to those reported for mandate roll calls in the 1980s.(33) For a similar universe of roll-call votes, Republicans were also generally more likely to vote for mandates. When disaggregated by similar policy dimensions, Republicans supported mandates in the welfare, moral policy, immigration, and business preemption areas. Democrats supported mandates in other areas of state and local service delivery such as motor voter, federal highway speed limits, and extending Medicare payroll taxes to state and local employees. These findings again indicate that mandates as a tool of government do not call forth stable partisan alignments, a result differing from studies of voting on federal grant support, which finds Democrats consistently supporting higher federal aid than Republicans.(34)
The balance of interest-group pressures has a major influence on mandate outcomes as well. Many of the mandates passed in 1996 were generated and supported by powerful national interest groups in alliance with congressional entrepreneurs who realized that their national goals critically depended on either preempting or conscripting the states. State and local governments faced a formidable array of interests advocating mandates, including some of the most powerful business interests in Washington. For example, the telecommunications industry, although beset by internal differences, was united in pushing for preemption of state and local taxing and zoning authority, while national securities firms and pesticide companies have long sought preemption of state regulation. When not facing powerful business alliances, state and local governments had to face labor unions on the minimum wage and mental health parity mandates. A host of "externality groups" has also grown up to represent broader interests on environmental, public health and consumer issues and have gained significant regulatory victories in the past thirty years.
Facing this array of groups, state and local governments have their own associations in Washington, D.C. and these groups have great power potential when they are able to marshal a unified and active lobbying presence. Indeed, previous state and local victories on revenue sharing in the 1970s, Fair Labor Standards overtime rules in the 1980s and UMRA in the 1990s show that, although no longer structurally deferential to state and local interests, Congress will respond favorably to state and local governments as an interest group. However, specific mandate proposals present state and local associations with difficult internal political problems, which often constrain these organizations from being an effective, unified voice on specific mandates.
First, state and local officials often agree with the goals of mandates, partly because many mandates are based on initiatives already in place in numerous states and localities. Thus, mandates often garner state and local support, or at least ambivalence. As Daniel J. Elazar notes, many states have little problem adjusting to federal standards when they have themselves often adopted these standards in similar form earlier.(35) The new welfare mandates, for instance, were developed with the support of Republican governors whose states were already implementing work requirements and other welfare limitations. Mandates can be useful for these officials in protecting themselves from opposing political constituencies within the jurisdiction. For instance, local public water officials have used federal drinking water standards as a ceiling on local responsibility when dealing with local groups seeking total removal of drinking water contaminants.
Second, as associations representing elected political leaders, state and local groups have difficulty opposing mandates defined in publicly compelling terms. The valence character of many mandates makes politicians at all levels loathe to oppose these publicly compelling mandates. In fact, the nationalization of media and political culture increases the vulnerability of state and local leaders to the same publicly compelling causes and policy stampedes as national leaders. Allegiances to nationally pervasive values cross-pressures state and local groups and tempers, neutralizes, or even subverts their defense of their jurisdictional prerogatives. Thus, for example, state and local officials did not publicly oppose the minimum wage hike, nor could they publicly condemn the new federal health-insurance standards embodied in Kennedy-Kassebaum legislation.
Third, internal partisan and political differences also make it difficult for these groups to take unified positions on many mandates associated with partisan agendas. For example, the National League of Cities (NLC) faced considerable internal conflict on the Family and Medical Leave Act in 1993, preventing the organization from mustering the required two-thirds vote needed to lobby against this mandate. One NLC lobbyist indicates that national interests are asserting new pressures within the organization that could create greater internal conflict over mandates. The Christian Coalition is forming a caucus of city officials within NLC, and this faction is urging support for legislation mandating local prayer in schools and other moral mandates. Representatives of gay and lesbian organizations want similar recognition.(36)
Mandates can also help state and local officials address problems resulting from intergovernmental competition, preventing a mutually destructive "race to the bottom" States or localities are tempted to reduce their own costs through exporting to other jurisdictions in such areas as welfare or environmental protection. Progressive states are loathe to let other states benefit from inaction, so these states have an incentive to support mandates requiring all states to have comparable programs.(37) The Brady Bill requiring local police checks on gun purchasers is an example where a federal mandate helped localities wishing to control guns deal with the exporting of guns from more lenient jurisdictions. The pending EPA air quality regulations tightening particulate and ozone regulations would create new burdens for a number of localities, but are nonetheless supported by many eastern states with Republican Governors as a way to deal with the exporting of air pollution from the Midwest.(38) Although federal mandates are popularly thought to arise in response to state policy inaction, in fact, state policy activism may itself form the political impetus for - or at least reduce the barriers to - new federal mandating among state and local officials themselves.(39)
This is not to say that state and local governments do not sometimes marshal strong opposition to mandates, as witness their campaign to modify telecommunications, securities, and driver's license mandates. However, when state and local governments did mount sufficient intensity and lobbying campaigns, they were effective in modifying mandates, but generally not in overturning the basic federal decision to mandate in the first place. Mandates are born in functionally based issue networks and congressional committees, environments where geographically based interests are often viewed as outsiders.(40) State and local governments enjoyed considerable success interacting with these program-based networks on grants because their interests were aligned with those of beneficiaries for more federal dollars. However, on mandate issues, beneficiaries and program advocates are in conflict with the state and local sector.
As defensive actors seeking to influence policy proposals developed in functionally based arenas, state and local governments can obtain influence over the design and funding of the mandate but often at the price of accepting the mandate itself. In 1996, for instance, state and local governments were successful in continuing fees on securities but had to accept the basic regulatory preemption framework in the pending legislation. Even where they had successfully redefined the terms of the debate in safe drinking water, state and local governments had to strike a deal with environmental supporters by agreeing to several new mandates as the price to gain support by the environmental committees and support by the president.(41)
The onward march of federal mandates and preemptions in such an intergovernmentally propitious time suggests that the forces supporting intergovernmental regulation are deeply embedded in our system. Shifting alliances of congressional entrepreneurs and powerful interest groups embrace mandates as tools to achieve a variety of emerging goals placed on the federal doorstep in a national media culture. The party system, far from serving its historic role in articulating differences over federal role questions, joins in the support of mandates to attain differing national political objectives as well. Chronic federal deficits may exert devolutionary pressures with regard to federal grants by encouraging blocking of fast-growing entitlements,(42) but these same fiscal forces have a centralizing influence by prompting reliance on mandates and preemptions as tools of national action unconstrained by federal budgetary strictures. Ironically, deregulation of the private economy also prompts policy nationalization, as state and local regulations, taxes and fees come to be viewed as barriers to full competition.
While no longer structurally deferential to state and local interests, the Congress does respond to state and local governments as interest groups when they are able to organize intense, grass-roots lobbying campaigns. However, state and local organizations are frequently too internally conflicted and cross-pressured on mandate issues to mount the kind of effective lobbying needed to protect their interests, particularly when opposed by large alliances of well organized mandate proponents. In a political system dominated by functionally based issue networks, their influence is most often achieved not be defeating mandates or preemptions but by making modifications to provide funding and flexibility in the implementation of these regulatory programs.
The challenges to state and local prerogatives will likely intensify during the coming years. Proposals receiving consideration by the 105th Congress in 1997 include significant mandates and preemptions in a variety of areas. Deregulation of the telecommunications industry and new proposals for deregulating electric utilities have major implications for state and local authority. National firms continue to urge preemption, ranging from proposed legislation to preempt state and local taxation of the Internet to renewed calls for federal product-liability standards. Criminal justice continues to be a focus of new proposed intergovernmental regulation. The "No Frills Prison Act" (HR 169) sponsored by seven Republicans, for instance, would as a condition of criminal justice aid, prohibit state and local prisons from offering prisoners such amenities as: (1) musical instruments; (2) personal computers; (3) coffee pots; or (4) food exceeding the quality provided to Army enlisted personnel. Bipartisan pressures have also accelerated for further federal regulation health care by HMOs and for extensions of health coverage to children. The social and moral policy agenda continues to feature mandates and preemptions on abortion, school prayer, expansion of family leave, and other family policy issues. Finally, bipartisan pressures to achieve a balanced budget by year 2002 as well as the longer term federal budgetary pressures arising from the baby-boom generation's retirement suggest that the reliance on regulation rather than grants or other spending tools will continue, as will efforts to cap and devolve open-ended entitlement programs like Medicaid.(43)
The reforms ushered in by UMRA could not be expected to reverse these fundamental political forces. Rather, they represented modest changes in procedure that could only work if backed by active supporters of state and local prerogatives and a friendly political climate in the Congress. In this context, UMRA achieved modest success in some important cases. Although not clearly reversing mandate decisions, the procedures facilitated efforts to modify mandates by highlighting intergovernmental costs. Given that mandate advocates have so often been successful in defining the terms of the debate in publicly compelling ways, shifting the terms of the debate to emphasize costs and burdens is no small accomplishment. Particularly when viewed against the continuing appeal that mandates have in our national policymaking process, UMRA's achievements can be best likened to what Samuel Johnson once said about the dog who walked on only his hind legs: what is remarkable is not how awkwardly he walks, but rather that he walks at all.
It remains to be seen whether these gathering forces will materialize in a new wave of nationalization of domestic policy or whether state and local governments can build on UMRA to forestall such initiatives and achieve further rollbacks of regulatory programs. Anthony Downs has observed how nonincremental policy change follows predictable cycles, initiated by seemingly unstoppable bandwagons of enthusiasm followed by periods of disillusionment and reconsideration.(44) David Vogel observed that business influence in Washington, D.C. has a cyclical character as well, peaking during periods of economic stagnation.(45) Intergovernmental reform may also have a cyclical nature, as was evidenced in the Reagan era when deregulation ushered in a new wave of regulation in the late 1980s and early 1990s. Ultimately, the sustainability of UMRA will hinge on whether the protection of state and local governments against federal regulation becomes more politically compelling than the particular goals advanced by mandate advocates.
AUTHOR'S NOTE: The author would like to thank David R. Beam, Timothy J. Conlan, Terri Gullo, and Carol S. Weissert for their comments on earlier drafts. The views presented are the author's and do not necessarily represent those of the U.S. General Accounting Office or Georgetown University.
1 Public Law 104-4, 109 Stat. 48.
2 David R. Beam and Timothy J. Conlan, "The 1995 Unfunded Mandates Reform Act: The Politics of Federal Mandating Meets the Politics of Reform," Journal of Public Budgeting and Financial Management 7 (Fall 1995: 355-386; John Kincaid, "Intergovernmental Deregulation?" Public Administration Review 55 (September/October 1995): 495-497.
3 U.S. Advisory Commission on Intergovernmental Relations, Regulatory Federalism: Policy, Process, Impact, and Reform (Washington, D.C.: ACIR, 1984).
4 A mandate can be considered funded and therefore exempt from points of order if it contains either new entitlement spending or provides authorization for appropriations and a plan for agencies to reduce the scope of the mandate should appropriations fall short of CBO's estimated costs.
5 Paul L. Posner, The Politics of Federal Mandates: Congress at the Frontiers of Federalism (Washington, D.C.: Georgetown University Press, forthcoming).
6 See Paul L. Posner and Margaret T. Wrightson, "Block Grants: A Perennial But Unstable Tool of Government," Publius: The Journal of Federalism 26 (Summer 1996): 87-110.
7 Timothy J. Conlan, James D. Riggle, and Donna E. Schwartz, "Deregulating Federalism? The Politics of Mandate Reform in the 104th Congress," Publius: The Journal of Federalism 25 (Summer 1995): 23-40.
8 U.S. Congressional Budget Office also included estimates conducted at the request of individual members on proposed bills.
9 U.S. Advisory Commission on Intergovernmental Relations, Federal Regulation of State and Local Governments: The Mixed Record of the 1980s (Washington, D.C.: ACIR, 1993). The report lists thirty-one reported mandates; Posner, The Politics of Federal Mandates.
10 Mandates were considered major if they exceeded the $200 million threshold defined in the State and Local Cost Estimation Act of 1981 (P.L. 97-108).
11 U.S. Congressional Budget Office indicates that a fourth bill mandating mental health parity for health insurance was also modified to fall below the threshold, but it is not clear that the UMRA provision itself was responsible for this change. Lobbying by private employers and the insurance industry affected by parity was probably most responsible for the bill's modification.
12 Letter from U.S. Congressional Budget Office to Senator Alan Simpson, 2 May 1996.
13 Letter from U.S. Congressional Budget Office to Representative Thomas Bliley, Jr., 6 June 1996.
14 See R. Douglas Arnold, The Logic of Congressional Action (New Haven, CT: Yale University Press, 1990); John Kingdon, Congressmen's Voting Decisions, 3rd ed. (Ann Arbor: University of Michigan Press, 1989).
15 Letter from U.S. Congressional Budget Office to Senator Nancy Kassebaum, 25 March 1996.
16 This provision attempted to sidestep the U.S. Supreme Court's United States v. Lopez decision overturning a previous federal gun ban by stipulating that a gun must be shown to have traveled in interstate commerce.
17 Angela Antonelli, Promises Unfulfilled: Unfunded Mandates Reform Act of 1995 (Washington, D.C.: The Cato Institute, 1996).
18 U.S. Advisory Commission on Intergovernmental Relations, The Role of Federal Mandates in Intergovernmental Relations, draft for discussion (Washington, D.C.: ACIR, 23 July 1996).
19 U.S. Advisory, Commission on Intergovernmental Relations, Federal Regulation of State and Local Governments.
20 Letter from U.S. Congressional Budget Office to Representative Thomas Bliley, Jr., 25 June 1996.
21 Letter from U.S. Congressional Budget Office to Representative John Kasich, 26 June 1996.
22 See U.S. Advisory Commission on Intergovernmental Relations, Federal Regulation of State and Local Governments; Posner, The Politics of Federal Mandates.
23 See David Mayhew, Congress: The Electoral Connection (New Haven, CT: Yale University Press, 1978).
24 Andrew McFarland, "Interest Groups and the Policymaking Process: Sources of Countervailing Power in America," The Politics of Interests, ed. Mark P. Petracca (Boulder, CO: Westview Press, 1992), pp. 58-79.
25 See Frank R. Baumgartner and Bryan D. Jones, Agendas and Instability in American Politics (Chicago, IL: University of Chicago Press, 1993).
26 See Hugh Heclo, "Issue Networks and the Executive Establishment," The New American Political System, ed. Anthony King (Washington, D.C.: American Enterprise Institute, 1978), pp. 87-124.
27 Daniel J. Elazar, "Opening the Third Century of American Federalism: Issues and Prospects," Annals of the American Academy of Political and Social Science 509 (May 1990): 11-21.
28 Timothy J. Conlan, "Federalism and Competing Values m the Reagan Administration," Publius: The Journal of Federalism 16 (Winter 1986): 2947.
29 See Baumgartner and Jones, Agendas and Instability in American Politics, p. 150.
30 See Anthony Downs, "Up and Down With Ecology - The Issue Attention Cycle," The Public Interest 28 (Summer 1972): 38-50.
31 Posner, The Politics of Federal Mandates.
32 Burt Solomon, "Just Because of the Election, Parolees Face Testing for Drugs," National Journal 26 (October 1996): 2304.
33 Posner, The Politics of Federal Mandates.
34 Demetrios Caraley, with Yvette R. Schlussel, "Congress and Reagan's New Federalism," Publius: The Journal of Federalism 16 (Winter 1986):49-80.
35 Daniel J. Elazar, American Federalism: A View From the States, 3rd ed. (New York: Harper and Row, 1984), p. 111.
36 Interview with Frank Shafroth, Director of Federal Relations, National League of Cities., Washington, D.C., March 1997.
37 Susan Rose-Ackerman, "Does Federalism Matter? Choice in a Federal Republic," Journal of Political Economy 49 (Winter 1981): 152-163.
38 Joby Warrick, "Downwind States Welcome EPA Smog Plan," Washington Post, 16 March 1997, p. A16.
39 Many have noted that state policy activism can prompt national policy adoptions by stimulating interest among program advocates. For example, Richard P. Nathan, "Federalism - The Great Composition," The New American Political System, ed. Anthony King, 2nd ed. (Washington, D.C.: American Enterprise Institute, 1990), pp. 231-262.
40 See Donald Haider, When Governments Come to Washington (New York: The Free Press, 1974).
41 Similarly, business groups were reported to gain modifications to regulatory legislation only by accepting the inevitability of the underlying federal regulatory program. See Richard A. Harris, "Politicized Management: The Changing Face of Business in American Politics," Remaking American Politics, eds. Richard A. Harris and Sydney M. Milkis (Boulder, CO: Westview Press, 1989), pp. 261-288.
42 See Posner and Wrightson, "Block Grants."
43 U. S. Congressional Budget Office, Long-Term Budgetary Pressures and Policy Options (Washington, D.C.: CBO, 1997).
44 Downs, "Up and Down With Ecology," pp. 38-50.
45 David Vogel, Fluctuating Fortunes: Business in American Politics (New York: Basic Books, 1984).
Paul L. Posner is Director for Federal Budget Issues at the U.S. General Accounting Office. He also serves as Adjunct Professor in the Graduate Public Policy program at Georgetown University. He is a Fellow of the National Academy of Public Administration and is on the executive committee of the Section on Intergovernmental Administration and Management of the American Society of Public Administration. His articles have appeared in Publius: The Journal of Federalism, Political Science Quarterly, National Tax Journal, and Public Administration Review.
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|Author:||Posner, Paul L.|
|Date:||Mar 22, 1997|
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