In his January 1959 State of the Union, in the waning years of his presidency, President Dwight Eisenhower called for a Commission on National Goals. In a speech dominated by Cold War concerns and gargantuan military spending, Eisenhower took the privilege of the presidency to “express something that is very much on my mind:”
The basic question facing us today is more than mere survival — the military defense of national life and territory. It is the preservation of a way of life.
…
We can successfully sustain security and remain true to our heritage of freedom if we clearly visualize the tasks ahead and set out to perform them with resolution and vigor. We must first define these tasks and then understand what we must do to accomplish them.
If progress is to be steady, we must have long-term guides extending far ahead, certainly five, possibly even 10 years … They must be goals that stand high, and so inspire every citizen to climb always toward mounting levels of moral, intellectual and material strength.
To define these goals, I intend to mobilize help from every available source.
The Committee I plan will comprise educators and representatives of labor, management, finance, the professions and every other kind of useful activity.
The Committee would be concerned, among other things, with the acceleration of our economy’s growth and the living standards of our people, their health and education, their better assurance of life and liberty and their greater opportunities. It would also be concerned with methods to meet such goals and what levels of government — Local, State, or Federal — might or should be particularly concerned. (emphasis added)
This is what leadership used to look like in the United States. And it’s classic Eisenhower. A military man who was deeply concerned with the power and reach of the “military industrial complex” and sought a balanced approach to long-term societal progress. A national hero who was deeply respectful of federalism and sought a rational, evidence-based approach to the design and delivery of national goals across all layers of government and society.
“Goals for Americans”
Eisenhower was true to his word. He pulled together a group of “wise men,” (yes, they were all White men) led by Henry Wriston, the former President of Brown University, to populate his Commission on National Goals. Other members of the Commission included the leaders of companies like General Dynamics and Dupont and the current or former presidents of MIT, Harvard, the University of Virginia and the University of California. George Meany, president of AFL-CIO, also served.
In November 1960, shortly after the election of John Kennedy, the Commission dutifully reported out, publishing a book entitled “Goals for Americans.” It’s difficult to say whether the Commission lived up to Eisenhower’s expectations. But the Commission left one indelible mark. The group conducted their work by commissioning scholars to contribute individual chapters. In a remarkable contribution, Morton Grodzins, a political science professor from the University of Chicago, provided a chapter entitled “The Federal System.”
In his chapter, Grodzins famously observed, “The American form of government is often, but erroneously, symbolized by a three-layer cake. A far more accurate image is the rainbow or marble cake . . . As colors are mixed in the marble cake, so functions are mixed in the American federal system.” (emphasis added)
Federalism is getting remade de facto in our country, whether we like it or not. The time for sorting out a new array of federalist roles and responsibilities has arrived.
The marble cake challenge
Grodzins’ observation is highly relevant as states and cities begin the hard work, in the words of a recent article, of “defederalizing the republic.” As the federal government scales back recklessly and chaotically, states and localities, and their corporate and civic allies, must now sort out how to take on greater responsibilities.
For many elements of domestic policy, the challenge is how to disentangle the entangled.
In June of last year, for example, a few colleagues and I described the “marble cake” that is U.S. housing policy:
Housing has become confusingly federated; everyone is in charge, so no one is in charge. The federal government has built an intricate set of primary and secondary market entities (e.g., FHA, Fannie Mae, Freddie Mac), a powerful set of homeownership tax incentives (e.g., the mortgage interest deduction) and a litany of affordable housing programs including the Treasury’s Low Income Housing Tax Credit (“LIHTC”) program and Community Development Finance Institutions and HUD’s HOME Investments Partnership Program, vouchers, and public housing. The Departments of Transportation and Energy have also recently gotten into the act with innovative loan and grant programs around energy efficient housing and transit-oriented development.
Meanwhile, states and localities provide both financial incentives to build more housing and implement restrictions that make housing costlier and more difficult to build. States are responsible for certain land use regulations, building code regulations, state Housing Finance Agencies, and certain tax incentives. Local municipalities also provide financial incentives through trust funds, tax abatements, and public asset disposition, but limit housing growth through some land use regulations, design and development restrictions, and rental regulations. The result is a maze of interrelated and conflicting programs and an unclear central nucleus for housing leadership.
A different marble cake could be described for transportation or education or childcare or virtually any of the core building blocks of a modern society and advanced economy. Yet the questions across all areas of domestic policy are the same: What must the federal government do? What can the states do? What should be the role of localities? What sources of capital can be brought to bear at the subnational levels?
The marble cake challenge is different for those few elements of federal policy where we have been slow to even recognize the extent to which federal, state and local actions are entangled. Investments in defense, for example, have historically been seen as the exclusive domain of the federal government.
Yet current geopolitical threats require a substantial boost in defense manufacturing and technological innovation, which are all dependent on states and localities and a broad array of traditional defense contractors, unconventional tech entrepreneurs, national labs, research universities, private capital and the state economic development organizations and metropolitan business and workforce alliances that power metropolitan economies.
All that is needed is a small amount of philanthropic funding and some smart, focused organizing.
The lines between the defense and civilian economies have essentially been blurred, if not erased. The defense economy is already absorbing next-generation technologies that were developed for civilian use. And defense innovation will, no doubt, drive the invention of dual-use technologies (e.g., AI, robotics, additive manufacturing) which will blow through the economy.
And, so, we have multiple marble cake challenges before the nation. How do we disentangle the entangled for a broad set of domestic policies and set out a course of action for states and localities (and the broader ecosystems that come to ground in place) that can be designed, financed and delivered? At the same time, how do we recognize the entanglement of what now appears disentangled, so that the country can achieve national security imperatives, broadly defined.
A shared solution
Richard Nathan, a giant in the field of government and governance, provides helpful guidance as we begin to address the marble cake challenge.
Responsibilities for governmental functions can be shared in three major ways, through policymaking, finance and administration. Typical of many functional areas of U.S. domestic public affairs are intergovernmental arrangements whereby the national government has a role in making policy and financing it but administrative responsibility is lodged with the states, which also share in policymaking and financing. This is because the American brand of federalism has produced surges of governmental growth and activism on the parts of both the national government and the states. (emphasis added)
Are states and localities, using the Nathan matrix, up to the marble cake challenge? It’s been a while since the 1950s and 1980s, when federalist research and thinking enjoyed a burst of energy. And a good portion of that work was financed by the long defunct Advisory Commission on Intergovernmental Relations.
The good news is that there is a broad network of reflective practitioners and researchers across states, localities, universities and beyond that can be tapped and engaged. All that is needed is a small amount of philanthropic funding and some smart, focused organizing. That is already happening in the housing space with the National Housing Crisis Task Force and can be spread quickly across the policy spectrum.
Federalism is getting remade de facto in our country, whether we like it or not. The time for sorting out a new array of federalist roles and responsibilities has arrived.
Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University.
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