• Freedom
  • Innovation
  • Growth

Federal Funds Always Come with Strings Attached--Eventually

It has to be the biggest legal financial scam there is: The federal government takes our tax dollars, extracts a healthy portion for itself, and then gives us back part of that money—but only if we do what the federal government says. Strangely, most voters seem to embrace this process and eagerly vote for those politicians who excel in perpetrating the scam.
President Biden has decided to tell hospitals and nursing homes that receive federal funds for Medicare and Medicaid patients that their employees must be vaccinated or risk losing their federal funding.
It’s an important reminder that federal money ALWAYS comes with strings attached. The only question is when and for what purpose the feds will jerk those strings. Covid-19 has exposed the jerk once again.
In this case we’re not addressing whether the federal government has the constitutional authority to mandate workers be vaccinated—its own employees or those of private sector businesses. The U.S. Supreme Court will have to settle that issue.
Nor are we addressing whether hospital and nursing home employees should be vaccinated. (We think they should.)
Our focus is on the decades-old practice of the federal government handing out billions of taxpayer dollars to states, cities and even businesses, and then using those funds as leverage—blackmail?—to coerce those entities to do the feds’ bidding.
For example, in the wake of the Arab oil embargo, in 1974 Congress passed legislation setting a top highway speed of 55 miles per hour—and made a portion of federal highway funding contingent on states adopting that speed limit.
The only good thing to come out of that law was rocker Sammy Hagar’s 1984 hit “I can’t drive 55.” (Nobody else could either.)
The Republican Congress repealed that law in 1995, letting states determine their own speed limits. But Congress has taken similar steps with motorcycle helmets and the legal drinking age. 
And health care. In the Affordable Care Act Democrats tried to make all federal Medicaid funds for states contingent on expanding their Medicaid program. The Supreme Court nixed that effort.
Of course, holding federal funds hostage to the federal jerk wouldn’t be so effective if there weren’t so much money involved.
According to the Tax Policy Center, “The federal government distributed about $721 billion (about 16 percent of its budget) to states and localities in fiscal year 2019, providing about one-quarter of these governments’ total revenues.” (Visit this link to see which states receive the most money per capita.)
Our alternative: Cut federal tax rates dramatically in order to stop—or at least minimize—Washington politicians and bureaucrats from using tax dollars they take from us to buy our votes when they give some of that money back.
Don’t want the federal government telling you what to do? Don’t give Washington the money it uses to bribe us.