Critics of Federal Spending on Cities Should Look to the South

In his piece this week, "Baltimore, a Great Society Failure," National Review editor Rich Lowry presents events in Baltimore as demonstrative of the failure of social programs dating back 50 years to the War on Poverty.

"The city hasn't been 'neglected,'" Lowry asserts. "It has been misgoverned into the ground. It is a Great Society city that bought into the big-government vision of the 1960s more than most, and the bitter fruit has been corruption, violence and despair."

Lowry's piece walks through all of the evils that plague urban America. Hostility to business, high taxes, crime, patronage, single parent families and teachers unions. All in a state, he points out, with among the most generous welfare systems in the country.

Lowry's focus may have been Baltimore, but his larger purpose was to take advantage of the public's momentary focus on the plight of urban America to suggest that more of the same is unlikely to cure what ails that or other cities. Conditions in Baltimore mirror the state of affairs across urban America. Lowry's is an indictment of social policies dating back a half century to the Great Society of Lyndon Johnson.

"This is a failure exclusively of Democrats..." Lowry stated, just in case his point was lost on anyone. "It is an indictment of a failed model of government."

In the normal course of events, a presidential campaign should be the platform for a public debate on issues such as those raised by Lowry. This debate is nothing new, as the ink on the Great Society legislation was barely dry before Daniel Patrick Moynihan -- a Democrat in Richard Nixon's administration -- raised questions that mirror those suggested by Lowry 45 years later. Whether the Democrat nominee is Hillary Clinton -- or by some outside chance former Baltimore Mayor and Maryland Governor Martin O'Malley -- Lowry has provided the broad strokes of the conservative critique of Democrat domestic policy. For her part, Hillary will be torn between the law and order centrism of her husband in her effort to retain white male voters, and the progressive stance of the Democratic left that Lowry suggests "has a soft spot for rioters." It is a trap, as Lowry understands well, from which she will have no easy escape.

Lowry's piece was not directly prescriptive of what should be done for what ails Baltimore, but his prescription was implicit: End federal programs and investments that have failed to work, and focus instead on tax, regulatory, education and other institutional reforms at the local level. If we are to engage the debate that Lowry suggests on the effectiveness of federal spending in alleviating problems of poverty and economic development, perhaps we could broaden our horizons beyond just the past 50 years. This April marked the 150th anniversary of the Robert E. Lee's surrender to Ulysses S. Grant at Appomattox Courthouse in April 1865. Since the end of the Civil War, the federal government has made huge investments in the south -- through the location of military bases, investments in waterways, hospitals and rural electrification, and in myriad other ways.

What began as an effort to control the south during reconstruction continued as an effort to lift the south up from poverty and spur economic development. It continues today in large measure due to our constitutional bi-cameral framework that gives smaller states a disproportionate number of representatives and power in Congress relative to larger states. Year in and year out, those states get more back from the federal government than they pay in. For example, in 2013 alone the 11 former states of the confederacy received $287.7 billion more back from the federal government than they paid in.

Of course, that $287.7 billion of federal money had to come from somewhere, and that somewhere is the rest of us. My state, California, which is significantly disadvantaged due to its size, pays in almost $100 billion more each year than it receives back from the federal government. Our money flows through Washington, D.C., to benefit residents of the former states of the confederacy and other small states, who benefit to the tune of an annual subsidy on the order of 20 percent of their personal income.

For 150 years, the federal government has poured money into the south, but to little avail. Perhaps the simple proof of Lowry's argument of the failure of social program spending is less in Baltimore than in the former confederate states. After a century and a half of throwing federal money at the problems of poverty and underdevelopment in the south, a brief review of socio-economic indicators -- infant mortality, educational attainment, life expectancy -- show that cohort of states firmly ensconced in the bottom quintile of states. In Lowry's words, it is an indictment of a failed model of government.

If we are going to discuss the effectiveness of federal policies in our cities -- and we should -- it is time to discuss as well why some states continue to benefit systemically to the disadvantage of others, with little or no benefit to show for it in terms of relative progress as measured by socio-economic indicators. Californians are often ridiculed for our high income tax rates relative to other states. If only we could manage our affairs like Tennessee -- 47th, 44th and 41st in infant mortality, life expectancy and educational attainment, respectively -- a friend of mine often suggests, our tax rates would be lower and our economy would expand faster.

My friend has a point. Perhaps it is time for some accountability, as Lowry suggests, and to put an end to this failed experiment that has flooded federal money into a cohort of smaller states, to no demonstrable effect. A simple solution would be a constitutional amendment that provides that no state shall have to pay in to the federal government more than 110 percent of what it gets back.

Last year, California contributed $334.4 billion to the federal government and received $238.7 billion, for a net outflow of $95.7 billion. If California's contribution to other states that for so long have fed disproportionately at the federal trough were limited to 10 percent, as suggested above, the savings to Californians would roughly equal the $75.2 billion we now pay in our very high income taxes.

Today, Californians are being taxed $238.7 billion to fund our fair share of federal spending, and an additional $95.7 billion to pay for transportation, education, healthcare and water projects in states across the south and elsewhere. $95.7 billion is almost equal to the entire California General Fund budget and we sure could use that money back here at home. In one fell swoop, we would have the capacity to rebuild our own transportation, education and water systems. Or we could completely eliminate the state income tax and restore California's role as an economic engine for the nation and the world.

The proposed constitutional amendment -- the Howard Jarvis Restoration of Freedom and Accountability Act -- should appeal to Lowry and the conservative, federalist sensibilities of the Republican caucus. We can start from the principle that it is our money, and there should be limits on the extent to which we should only be required to dole it out to Washington and the rest of the country. Call it a taxpayer revolt. In Rich Lowry's words, we are dealing with a failed model of government and it is time to change.