Ten years ago, the newly installed Republican Congress was deep into debating the contentious issue of unfunded mandates — the wonky term for the imposition of federal requirements on states without providing the funds to pay for them. State and local officials hated unfunded mandates, and Congressional Republicans — traditional supporters of deregulation and the devolution of powers — were in a mood to listen. [IMGCAP(1)]

With a reformist wind at their backs, the GOP majority managed to roll a generally skeptical Democratic minority and pass the Unfunded Mandates Reform Act of 1995, which placed an extra hurdle in front of Congress every time it was faced with an unfunded-mandate vote.

At the time, most observers saw the law’s passage as a sign that the entrenched Democratic Congressional majority’s intrusive style of governance was being replaced. And for a while during the 1990s, the tensions between state officials and the federal government eased.

Now, however, those tensions are back with a vengeance — and this time, the Democrats, lacking any foothold of power in Washington, can’t be blamed. Instead, state and local leaders are accusing Republicans in Congress and the administration of becoming just as overbearing and intrusive as their Democratic predecessors.

And who are these angry lawmakers? Not just cranky, out-of-power Democrats. This time, a lot of state and local Republicans are frustrated, too.

Duane Parde, executive director of the American Legislative Exchange Council — an alliance of conservative state legislators — said he has heard lots of complaints from his group’s Republicans.

“You would think this would be a great time” for supporters of limited government and devolution, Parde said. “But it hasn’t really turned out that way.”

In fact, GOPAC, a group dedicated to electing Republican state legislators, detected significant alienation in a recent poll of GOP state lawmakers.

GOPAC found that 83 percent of respondents want “more cooperation and communication with Congress.” In addition, two-thirds “believe that Congress impedes their work by issuing too many mandates.” Remember: This is their own partisan brethren they’re criticizing.

To ease these tensions, GOPAC Chairman J.C. Watts, the former Republican Congressman from Oklahoma, proposed in a letter to Speaker Dennis Hastert (R-Ill.) that the GOP leadership invite state legislators to testify more frequently, and to sponsor an annual summit to connect state lawmakers with Capitol Hill leaders.

Republican state Sen. Michael Balboni (N.Y.) is one of the officials helping to launch a new publication called Preemption Monitor. The Monitor, published by the bipartisan National Conference of State Legislatures, will track new laws, executive orders and judicial decisions that encroach on powers historically reserved for the states.

“I think you have two philosophies that have gotten us to the same place,” Balboni said. “When the Democrats were in power [in Washington], their philosophy was, ‘We know better than you do, and we can do this for you.’ The Republican philosophy seems to be, ‘We have a real, pressing need, and you’re not addressing it, so we’ll act if you won’t.’ But they both end up with the same result.”

Medicaid and Education Top the List

Sometimes, conflict has emerged over unfunded or insufficiently funded mandates. Other times, it has revolved around strings attached by the federal government to pots of money the states desperately want. And sometimes it has come from the federal government micromanaging tasks it has usually left to the states.

At the moment, the two biggest sources of frustration are Medicaid funding and the No Child Left Behind education law.

In the fight over next year’s federal budget, the House and Senate have been at loggerheads over whether to cut federal Medicaid payouts to the states. Critics, including the White House, would like to put an end to state budgetary maneuvers that they argue are tantamount to money laundering. But state leaders say such maneuvers are necessary to meet current health care needs. Republican and Democratic officials at the state and local level have teamed up to deliver that message to the White House and Congress.

Currently, Medicaid covers 53 million people — almost one in five Americans — with a price tag that is expected to reach $262 billion in 2010. Medicaid “is just eating state budgets alive,” said Thom Little, director of curriculum development and research for the bipartisan State Legislative Leaders Foundation.

In a recent discussion of Medicaid funding at the Kaiser Family Foundation, Virginia Gov. Mark Warner (D) complained that “the overwhelming number of Members of Congress don’t know anything about Medicaid,” noting that on more than one occasion, he’s heard Members refer to it as “Medicare,” its sibling program that serves the elderly. Warner added that many Members of Congress assume that it serves the poorest Americans, when in fact a large fraction of nursing-home residents rely on Medicaid to pay their bills.

In the meantime, President Bush’s No Child Left Behind Act has inspired an insurrection outside the Beltway.

“We think it’s a double whammy, because it doesn’t pay enough of the costs, and it enters the federal government in places it’s never been involved before,” said Carl Tubbesing, deputy executive director of the NCSL.

Sometimes resistance has emerged in blue states, such as Connecticut, where state Attorney General Richard Blumenthal (D) is suing the U.S. Department of Education on unfunded-mandate grounds. But more often the opposition has come from the Republican heartland.

In Texas — where then-Gov. George W. Bush and his education adviser Margaret Spellings lavished attention on improving schools during the late 1990s — state education officials have been involved in a face-off with Spellings, now the Education secretary, over how to apply the law’s rigorous testing requirements to students who are disabled or who grew up speaking languages other than English.

No state, however, has gone further than Utah. Though Utah gave Bush 71 percent of the vote in 2004, the Legislature has passed a measure that asserts the superiority of state education law over federal law, thus endangering $120 million in federal funding.

Earlier this month, Spellings pledged to offer states more flexibility in implementing the law. But early reaction suggests that state officials are skeptical.

A Litany of Grievances

Other issues, too, have become prickly. In Texas, for instance, lawmakers are chafing at federal provisions that are hampering a rewrite of the state’s decade-old sex-offender statute. State Rep. Ray Allen (R) would like to treat serious, violent offenders differently from, say, a 19-year-old and a 16-year-old who have consensual sex.

Currently, both scenarios are deemed to be aggravated sexual assault, requiring the same type of ongoing monitoring and restrictions. Allen, alluding to a pair of recent, high-profile murders of children by sex offenders in Florida, argues that his state should focus mostly on the highest-risk offenders. But if the state were to change the law, he said, it would lose $3 million to $5 million in federal funds.

Allen is also frustrated by what he considers the federal government’s abdication of responsibility on illegal immigration. Texas, he said, has incarcerated 7,300 illegal aliens for committing felonies, at a cost of roughly $150 million a year, even as Congress and the White House keep slashing a program that helps states pay for the side effects of illegal immigration.

“If this were occurring in the business world, there would be a big fat lawsuit,” Allen said.

Allen favors legislation backed by Sen. John Cornyn (R-Texas) that would create a documented guest-worker program for immigrants. “But it’s hard to get the other 40 or so Senators who don’t have border issues to get beyond the immigration rhetoric,” he said.

State and local officials are also worried about the USA PATRIOT Act. New York legislator Balboni said the law gives the federal government too much power over police and fire personnel — another quintessentially local duty. “When you dial 911,” he noted dryly, “it doesn’t ring in Washington.”

Referring to the Sept. 11, 2001, attacks, Balboni said, “I come from Long Island, and I lost friends in the towers. To me, there’s no more important issue than safety, and I agree with many provisions of the act. But I’m convinced it could have been done in a less intrusive way.”

And the flurry of pre-emptions isn’t over yet. State officials worry that the proposed REAL ID Act of 2005 — which would force states to verify a driver’s license applicant’s immigration status — forces state officials to do the federal government’s investigative work without any additional funding.

In the meantime, major tax reforms that Bush is seeking could greatly affect state revenues, since so many state tax regimes are based on the federal tax system. And proposals to overhaul medical malpractice laws would likely pre-empt state statutes, many of which were painstakingly rewritten in recent years.

So why are federalism concerns coming to a head now? Partly it’s structural: The federal government, saddled by a large and growing deficit, is looking to pare its expenses, while states try to decide what to do with expensive programs they created during the financially flush era of the late 1990s.

Also, Balboni suggests that Members of Congress, feeling constituent heat to fix even those problems they have not historically been responsible for, may be acting out of concern that voters will blame them first.

What’s odd, though, is that all this is happening with the GOP so firmly in charge in Washington. ALEC’s Parde said Bush was planning to take a firm stand on federalism around October 2001. Of course, 9/11 intervened — and everything changed.

‘A Big Disconnect’

Whatever the reason, state-federal tensions have been exacerbated by a lack of communication. To be sure, all the state lawmakers interviewed for this story emphasized how well they get along with their own Members of Congress. But that warmth clearly doesn’t extend to Capitol Hill as a whole.

“I think there’s a big disconnect,” said Joan Fitz-Gerald, Colorado’s state Senate president and chairwoman of the Democratic Legislative Campaign Committee. Washington, she said, can be “extremely paternalistic, and that doesn’t always sit well with the states.”

The partisan jousting in Washington — and the frayed nerves it has inspired — hasn’t helped matters, added Connecticut state Rep. Stephen Dargan (D). “The partisanship is not the same as it is in Congress,” Dargan said. “There’s more cooperation in the states — at least in Connecticut.”

Congress’ partisan battles — which are sure to worsen if Senate Republicans go “nuclear” on judicial appointments and Democrats retaliate by shutting down virtually all business in the chamber — have also given federal lawmakers a case of tunnel vision, legislators said.

“It seems like even my colleagues who left the Texas Legislature to go to Washington get so embroiled in Washington politics that they don’t communicate much with the Legislature,” Allen said. “There was a lot of contact around the time of redistricting, but a lot less before and after.”

But Balboni, for one, knows the long odds he faces in turning Congress’ attention to the federalism question.

“It’s not an immediate threat, and it’s not tangible, so it’s difficult to get people ramped up about this,” he said. “The whole issue is like watching paint dry. But even though it’s not the most exciting issue, the long-term ramifications are significant.”