Less than a week into the new year, the Trump administration kicked off 2018 with one of the most cynical and craven acts of political favoritism in recent American history. On January 4, Interior Secretary Ryan Zinke unveiled the Draft Five Year Outer Continental Shelf Oil and Gas Leasing Program. That massive gift to Donald Trump’s backers in the oil and gas industry would open virtually the entire coastal United States to energy exploration and drilling. Then just five days later, Zinke delivered another reward for loyalty, this time to Florida Republican Gov. Rick Scott. The Sunshine State, home to 29 electoral votes, Trump’s Mar-a-Lago resort, and Scott’s likely 2018 Senate bid, would get an exemption from the unpopular drilling expansion.
Zinke made no secret as to the reason why Florida was to be so blessed. “The governor,” Zinke admitted. "You have a tremendous governor that is straightforward, easy to work for, says exactly what he means. And I can tell you Florida is well-served.” Of course, his official statement tried to provide the thin veneer of a reasonable rationale for the administration’s naked partisanship:
“I support the governor's position that Florida is unique and its coasts are heavily reliant on tourism as an economic driver (so) I am removing Florida from consideration for any new oil and gas platforms.”
Needless to say, other coastal states—most of them governed by Democrats—were having none of it. Democratic Rep. Adam Schiff noted that California “like Florida, has hundreds of miles of beautiful coastline and a governor who wants to keep it that way. Or is that not enough for blue states?” His Golden State colleague Ted Lieu warned that Zinke’s Tallahassee Take-Back “violates the legal standard of arbitrary and capricious agency action.” And as CBS News reported, that’s not the only reason the Trump’s Panhandle Payoff might violate federal law:
Sen. Maria Cantwell of Washington state said Interior Secretary Ryan Zinke's decision to give Florida a last-minute exemption while ignoring at least 10 other states that made similar requests may violate requirements of the Outer Continental Shelf Lands Act, which governs drilling in U.S. coastal waters.
But you don’t have to take the word of these Democrats that something’s rotten in the state of Florida when it comes to Trump’s coastal drilling policy. Just ask Supreme Court Chief Justice John Roberts. After all, in his 2013 opinion striking down sections of the Voting Rights Act, Roberts invented a novel theory of “equal sovereignty” prohibiting “disparate treatment of states.” And as the President and his Republican allies in Congress seek new ways to punish blue states while rewarding red ones, Ruth Bader-Ginsburg’s warning that Roberts’ fictional constitutional construct “is capable of much mischief” may come to pass in ways neither anticipated.
As you’ll recall, the Voting Rights Act of 1965 was passed by Congress to empower the Justice Department to stop voter suppression and intimidation practices common throughout the Jim Crow South. Critically, sections 4 and 5 of the law subjected 13 primarily Southern states with a proven history of discrimination to “pre-clearance,” requiring the DOJ to approve any new voting laws prior to their implementation. Despite the fact that his administration brought only one VRA case (and that on behalf of white voters in predominantly black Noxubee County in Mississippi), President Bush signed the 25-year reauthorization of the Voting Rights Act in 2006. In the Senate, the vote was 98-0.
But for more than 30 years, John Roberts had been a strident opponent of the Voting Rights Act going back to his days as an attorney in the Reagan administration. During his Senate confirmation hearings, the future chief justice tried to assure Sen. Ted Kennedy that if a voting rights issue came before him on the Supreme Court, “I would, of course, confront that issue as a judge and not as a staff attorney for an administration with a particular position on that issue.” Roberts went even further, telling senators, “Judges are like umpires. Umpires don't make the rules; they apply them.”
But once on the Supreme Court, Roberts went back on his word. In the 2009 case of Northwest Austin Municipal Utility District v. Holder, Roberts complained of the VRA’s pre-clearance provisions that “this is going to go on forever.” After asking in oral arguments, “Are Southerners more likely to discriminate than Northerners,” Roberts ultimately answered his own question. In that case which still upheld the law, Roberts first introduced what seemed like a throwaway line about federal law treating states differently. As Lyle Denniston explained:
In that case, Chief Justice Roberts wrote a strongly worded opinion suggesting that the Voting Rights Act of 1965 might at some point be declared unconstitutional because it “differentiates between the states, despite our historic tradition that all the states enjoy ‘equal sovereignty.’” [Emphasis mine.]
But that dictum, or statement not essential to the ruling, became the basis for gutting the Voting Rights Act in the 2013 case of Shelby County v. Holder. In oral arguments, the chief justice once again posed his question, suggesting that the unique racism of the former Confederate states was a thing of the past.
"Is it the government's submission that the citizens in the South are more racist than the citizens in the North?"
In 2006, President Bush and a nearly unanimous Congress answered that question in the affirmative. And as Andrew Cohen noted in The Atlantic in February 2013, “It's a matter of record now that the vast majority of Section 2 voter discrimination cases -- 81 percent -- were brought in jurisdictions ‘covered’ by Section 5.
Nevertheless, Roberts declared that “things have changed in the South” and ruled:
“Over a hundred years ago, this court explained that our nation ‘was and is a union of states, equal in power, dignity and authority.’ Indeed, ‘the constitutional equality of the states is essential to the harmonious operation of the scheme upon which the Republic was organized.’…The fundamental principle of equal sovereignty remains highly pertinent in assessing subsequent disparate treatment of states. The Voting Rights Act sharply departs from these basic principles.” [Emphasis added]
Critics were quick to point out that, at best, Roberts badly misinterpreted and misused the Court’s precedent. At worst, Umpire Roberts was simply adding his own rules to the book. Judge Michael McConnell, formerly of the Tenth Circuit Court of Appeals and a Bush 43 nominee, was appalled. “There’s no requirement in the Constitution to treat all states the same,” he said, adding, “It might be an attractive principle, but it doesn’t seem to be in the Constitution.” Congress and the Supreme Court itself, Denniston pointed out, had only spoken of states being “on equal footing” only at the point of becoming part of the United States. As Richard Posner detailed, “Section 3 of Article IV of the Constitution authorizes Congress to admit new states to the Union, as it has done many times, but says nothing about the terms on which they are to be admitted.” Utah and other western states, for example, were forced to prohibit polygamy as a condition of entering the union, a requirement Tennessee did not face in 1796. The only Supreme Court precedent touching on equal treatment of the states, the 1911 case of Coyle v. Smith, arose in the context of the rights that states would have upon admission into the U.S.
As Denniston noted, in her Shelby County dissent Justice Ruth Bader Ginsburg delivered both a powerful rebuttal of Roberts’ invention and a stern warning about its implications for American federalism:
“The court pins its result, in large measure, to ‘the fundamental principle of equal sovereignty.’...However, the court [previously] held, in no uncertain terms, that the principle ‘applies only to the terms upon which states are admitted to the Union, and not to the remedies for local evils which have subsequently appeared.’…Today’s unprecedented extension of the equal sovereignty principle outside its proper domain – the admission of new states – is capable of much mischief. Federal statutes that treat states disparately are hardly novelties.”
Indeed. Take, for example, Medicaid, the $550 billion program that provides health care for 74 million lower-income Americans, children, the disabled, and elderly needing long term care. After the Supreme Court ruled in 2012 that the federal government could not force states into accepting the expansion of Medicaid under the Affordable Care Act, 19 ultimately chose not to do so. (Those states that did extended Medicaid coverage to those earning up to 138 percent of the federal poverty level; those that did not—like Mississippi—may stop coverage after as little as 24 percent of the FPL.) Nevertheless, “pre-expansion” Medicaid still plays a major role in health care in all 50 states. For example, Medicaid not only pays for one-third of nursing home care in the United States; it also covers one-third of all childbirths. (In Texas, the figure is one-half.)
Importantly, Medicaid is a joint federal-state program. In 2016, Uncle Sam paid 63 percent of the program’s costs, with the states picking up the rest. But it turns out that some states are more equal than others. As the Kaiser Family Foundation explained:
The Federal Medical Assistance Percentage (FMAP) is computed from a formula that takes into account the average per capita income for each State relative to the national average. By law, the FMAP cannot be less than 50%.
The result is that wealthier blue states generally get less federal funding, while less affluent red states pocket more. California, New York, New Jersey, and Massachusetts all get 50 percent of their Medicaid dollars from the federal government. But Texas gets 57 percent, while Florida (62 percent), Georgia (69 percent), Alabama (71 percent), Kentucky (71 percent), West Virginia (73 percent), and Mississippi (76 percent) all get much more. In the case of Medicaid, the states getting the most help are generally the same ones who got the most scrutiny under Section 5 of the Voting Rights Act.
When it comes to federal Medicaid funding, some states are more equal than others.
Now, most Americans would probably agree that this kind of approach is, well, the American thing to do. Better-off states should pick up more of their own Medicaid tab than those less able to foot the bill. But according to the Supreme Court under John Roberts, this kind of common sense public policy runs afoul of “equal sovereignty.” If the Constitution does not allow disparate treatment of the states, Democratic-controlled blue states seem to have a strong claim to reclaim a bigger piece of the federal pie from their red state brethren.
Especially since blue America is putting more into the pie to begin with.
In recent years, “red state socialism” has become the hallmark of American federalism. That is, even as supposed GOP budget hawks loudly (and wrongly) decry “out of control” spending by Uncle Sam, less well-off Republican-controlled states generally benefit from a one-way flow of federal tax dollars made possible by wealthier blue states usually dominated by Democrats. But that is as it should be. After all, Americans everywhere should want Americans anywhere to have the resources for the education, health care, and anti-poverty programs they deserve and may badly need. Patriotism, civic duty, community, and compassion don’t end at the state line.
And as The Atlantic summed up some of the analyses: measured by what they give to Uncle Sam versus what they get back, that compassion hits blue staters hard. Business Insider found that of the top 20 states pocketing more per capita from the federal government than they paid in taxes, 16 were Republican bastions. In 2017, WalletHub found that 15 of its top 20 most “federally dependent states” pulled the lever for Donald Trump; 9 of the 10 least dependent states went for Democrat Hillary Clinton.
But behind this tacit agreement that blue “maker” states would subsidize red “taker” states unable (or simply unwilling) to tax themselves to fund needed public services is a second bargain. For more than 100 years, blue states have taxed themselves at high rates in order to provide their own resources for health care, education, infrastructure, transportation, and other expenditures. In exchange, the federal government granted a deduction for state and local taxes (SALT). Until, that is, Donald Trump became president of the United States and signed the “Tax Cuts and Jobs Act” in December 2017.
Blue states generally have higher incomes, higher housing costs and higher taxes...
The deduction for state and local taxes has been part of the federal tax code since the 16th Amendment was passed and the federal income tax implemented in 1913. It was part of the Civil War income tax as well. None other than Alexander Hamilton in the Federalist Papers warned that “all the resources of taxation might by degrees become the subjects of federal monopoly, to the entire exclusion and destruction of state governments.”
In a nutshell, that’s what Donald Trump, Mitch McConnell, Paul Ryan, and their Republican majorities in Congress have done to Democratic state governments. By capping this tax break at $10,000 combined for state and local income and property taxes, Republicans in Washington, D.C. can export their austerity to the states. In higher-income states with costlier housing, the 10-grand limit will bring the pain. For years, they’ve made no secret of their intentions. Ronald Reagan called it “the most sacred of cows.” As former Michigan Congressman Dave Camp described his objective in 2014, “This deduction redistributes wealth to big-government, high-tax states from small-government, low-tax states.” In June, Speaker Ryan gave the game away on CNBC when he was asked how he would sell the idea to his GOP colleagues in states like New York, New Jersey, Massachusetts, and California:
“I would say two things. First of all, look at tax reform in its totality. Second of all, let’s get the tax rates as low as possible for everybody. Not based upon where you live. And third of all, let’s stop masking profligate governments, let’s stop disguising the inefficiencies of some of these state governments you just mentioned and make taxpayers and all of those other states … pay for these states don’t have their act together.”
With the exception of Illinois (currently under the mismanagement of Republican Gov. Bruce Rauner), these blue states very much have their act together. But thanks to DC Republicans, they’ll have to scramble to somehow sidestep the impact of the GOP’s blue-state payback, or face steep spending cuts as pressure to slash state taxes increases.
...and will get hit hard by the new GOP cap on the deduction for state and local taxes.
As it turns out, these are just some of the ways Republicans are making a mockery of Chief Justice Roberts’ conception of “equal sovereignty.” Attorney General Jeff Sessions and Homeland Security Secretary Kirstjen Nielsen have called for withholding federal funds from and even prosecuting officials in states and municipalities which have declared “sanctuary cities.” While the failed Graham-Cassidy health care bill would have massively shifted federal spending from California, New York, Maryland, Massachusetts, and other blue states to GOP-friendly states, House Speaker Paul Ryan has not given up his quest to convert a shrunken Medicaid program into block grants for the states. And it’s not to hard imagine the 2018 Trump “infrastructure plan” devolving into yet another conveyor belt of blue state cash into red state coffers.
That today’s vindictive Republican Party would resort to these kinds of measures to enforce blue state austerity is not surprising. If nothing else, after all, the GOP now is little more than a perpetual spite machine. But if Chief Justice John Roberts is to be believed, none of this is supposed to come to pass under his blighted theory of “equal sovereignty.” To be sure, blue state attorneys general will be heading to court to stop all of it. And when they get to the highest court in the land, those lawyers from Connecticut and California, New York and New Jersey could argue that our nation “is a union of states, equal in power, dignity and authority” and that “the fundamental principle of equal sovereignty remains highly pertinent in assessing subsequent disparate treatment of states.”
In the meantime, blue states should prepare—literally and metaphorically—to get drilled.
