Checks and Balance: That Sinking Feeling Outside the Beltway

State and local governments face ripple effect from federal budget cuts

Virginia Gov. Terry McAuliffe has hit the road to survive the Trump era, traipsing to the U.S. Capitol and around the globe doing damage control.

Donald Trump’s presidency and the GOP Congress have upended a lot more than Washington. State and local governments are under assault as they grapple with potential federal budget cuts and other policy changes that could ripple throughout the country.

They’re worried about a slash in Medicaid funding, a proposal to end a long-standing deduction for state and local income taxes, as well as plans to recast immigration and environmental laws.

McAuliffe, a Democrat who leads the bipartisan National Governors Association, is making frequent visits to Capitol Hill. He also recently returned from a “diplomatic” jaunt to Mexico and plans to travel to Europe and Canada. Trump has targeted longtime allies of the United States, including Canada and Mexico, over trade and immigration.

“We’ve had to double down. I’ve had to do extensively more travel to repair the damage because of his insults,” says McAuliffe, a longtime Clinton family confidant and former K Street operator.

On the Hill, he notes, “I will lean in and visit senators and members of Congress.”

The state of state and local lobbying has hit a decidedly perilous and consequential patch. With congressional earmarks gone, lobbyists for states, cities and counties can’t rely on lawmakers to fund specific programs. They worry that executive branch grants, which have largely replaced earmarks, may be subject to the political whims of the Trump team.

“I would say this is the most important time in the last three decades for state and local governments in Washington,” says Matthew Chase, executive director of the National Association of Counties. “As I tell our members, we went from dealing with nickel-and-dime issues to trillion-dollar issues.”

On top of that list, Chase says, are an estimated $880 billion in cuts to Medicaid over 10 years in the GOP health care bill, the Trump administration’s proposal to terminate some housing and infrastructure programs, and the potential loss of $1.3 trillion in revenue if the House GOP is successful in scrapping the state and local tax deduction.

So-called sanctuary cities, which want to stay out of the fray on immigration policy, are afraid Trump will target them for funding cuts if they don’t cooperate with federal authorities.

Groups such as the National Association of Counties have invited lawmakers and administration officials to visit local governments, and they’re scheduling meetings on Capitol Hill. 

“I’ll tell you, our members represent all political stripes,” Chase says. “They are most concerned about the disconnect in Washington from what is happening on the ground in their communities.”

It’s not all grim. Local governments, like corporations and business groups, are excited about the federal focus on regulatory relief, hoping that a rollback of federal regulations will spur jobs and economic investment on their turfs.

But when it comes to funding cuts, lobbyists for states and cities are making it personal with members of Congress by framing a proposed program elimination as something that will harm their constituents. State and local governments can use Republican rhetoric about the importance of states’ rights and local control to their advantage.

Toni Harp, mayor of New Haven, Conn., says her city is chartered by its state and isn’t required to be an extension of the federal Immigration and Customs Enforcement. 

“We’ve also made that clear to the people who live in our town,” she says.

Harp worries about current and future administration grants but says she’s relying on the African American Mayors Association for help in reaching lawmakers and the Trump White House. “It’s really effective to work with groups so they just don’t see New Haven, Conn., as wanting something but seeing there are hundreds of other cities that think this is important too.”

McAuliffe blasted Trump’s fiscal 2018 budget proposals and the House-passed health care bill that the administration backed.

Still, the Virginia governor says he and his fellow state leaders want to work with the Trump administration and the GOP Congress to expand federal investment into the nation’s infrastructure and other areas to create jobs.

He told Mexican officials during his recent trip that unlike Trump, he intends “to build bridges, not walls.”

But the toughest bridges may be the ones to the White House and Capitol Hill.

---

This article first appeared in CQ Roll Call, May 15, 2017. Reprinted with permission.