And so, it begins. Amidst the daily noise and chaos, the U.S. has begun a grand experiment, the radical defederalization of roles and responsibilities in the nation.
We have seen versions of this movie before of course, particularly during the 1980s when the Reagan presidency drove state innovations around healthcare and welfare reform. But this 21st century version of defederalization is happening at an unprecedented speed and scale, with much less ideological consistency and coherence and no coordination — none — between layers of governments.
The defining essence of the Trump administration, on the surface, has been about the aggregation and assertion of presidential power across multiple dimensions, at the expense of congressional and judicial power. This is apparent in the administration’s aggressive moves around trade, higher education, scientific research, immigration and government restructuring.
Trump is creating the platform for a “less perfect union” which, if it’s even imaginable, will make us more divided than we are today.
But the result of centralization involving the elimination of federal agencies, a scale back in federal spending and reductions in federal workforce? Decentralization. The centralization of power of the Trumpian kind, ironically but inexorably, leads to a decentralization of responsibility. Some level of government or sector of society — states, localities, private corporations, capital providers and civic institutions — must now do the work of the nation.
How will defederalization impact programs we use everyday?
A blizzard of seemingly unconnected actions is on course to change who does what in our republic.
The United States is on a path to becoming a federal republic more like Germany; i.e., a national government with scaled back powers and states and localities with scaled up responsibilities.
Sometimes, the administration’s defederalization push is clear, direct and explicit. Calls to eliminate the Department of Education, for example, have been accompanied by loud cries of “Send it back to the states!” In these cases, there are echoes of earlier fights in the 1980s and 1990s around which level of government is best suited to take on certain challenges.
Some level of government or sector of society — states, localities, private corporations, capital providers and civic institutions — must now do the work of the nation.
In other cases, the defederalization message is implicit and unspoken. Efforts to scale back entitlement spending in Medicaid and SNAP or curtail programmatic investments in basic research or housing say to the states (and other levels of governments and networks of stakeholders): “It’s your call as to whether you want to take up this area of domestic policy.”
Across all these dimensions is a vision of a national government that is radically smaller in size, with less ambitions and capabilities around delivering or co-delivering core elements of domestic purpose. In a recent speech, Elon Musk has even talked admiringly of the nation’s founding, when the federal government consisted of a few central roles and positions.
It is dangerous, of course, to assume that the Trump administration will be successful at all the disruptions they have put in motion. The “throw spaghetti at the wall and see what sticks” approach to governance means that some “reforms” (a polite euphemism for the destruction underway) will not come to pass. And Congress (remember that co-equal branch of government?) still needs to take budget, appropriations and tax actions.
But more retrenchment seems likely to happen than was assumed even a month ago. Which raises the questions: What happens at the other end of this onslaught? Is our federal republic — states for sure but also cities, counties working in collaboration with private and civic institutions — capable of replacing what has been lost?
Some of this, plain and simple, is about resources. One can imagine, for example, that states and localities can find the right mix of public, private and civic resources to boost the production and preservation of housing that is affordable to a broad range of households or financial mechanisms to expand transportation options that provide people with more choices than dependence on cars and roads. Those are capital expenditures that can leverage the federal platforms that remain, draw from multiple non-federal wells and build on devolved powers, as they do in other countries.
Can states and localities replace tens of billions of dollars in income transfers to very poor families? Less easy and less clear.
Some of this is about capacity. A recent op-ed in Education Week had this take:
Strengthening education isn’t simply about shifting responsibility from the federal government to the states; it’s about ensuring there’s vision capacity and alignment to turn policy into lasting change for students.
State education departments have been shaped over decades to serve as regulatory monitors, not reform drivers. … This dynamic has created a tension between compliance with federal requirements and the need for state level innovation. Now, with Washington racing to pull back, these agencies may find themselves thrust into a more central role in shaping education policy — despite lacking the structure, know-how, or flexibility to do so. Instead of channeling efforts productively, this shift risks spilling out in all directions, creating confusion rather than progress.
And some of this is about evidence and accountability. The U.S. has built over decades a globally admired data and research infrastructure at the national level, which has enabled communities and states to understand their distinctive economic and social starting points and know when they are making progress on hard challenges and when they are not. The rush to root out government fraud, waste and abuse and drive government efficiency is also intentionally ripping the wires out of foundational measures and metrics. How those foundations get replaced, either at the state or regional level or through national networks, is complex, to put it mildly.
The risks associated with defederalizing a republic, without even the semblance of a plan, is vast. The country runs the risk of exacerbating inter- and intra-regional disparities, given the variance of state and local powers, market dynamics, philanthropic wherewithal and political perspectives. Trump is creating the platform for a “less perfect union” which, if it’s even imaginable, will make us more divided than we are today.
It seems like an impossible and improbable ask to make during this period, but there is an urgent need to start designing the next version of our republic, even as the scale of retrenchment and structural upheaval remains unclear. The federal government apparently has the luxury to be reckless and stupid and destructive. The country does not.
The genius of America, our true exceptionalism, is that our national sun doesn’t rise or set depending on who sits in the White House. “Power belongs to the problem solvers,” as Jeremy Nowak and I observed years ago in The New Localism: How Cities Thrive in the Age of Populism. More true than ever.
Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University.
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