The unfunded mandate reform act: working well for no good reason.

• Author: Kelly, Janet M.

Despite relatively weak procedural requirements and several loopholes, the unfunded mandate reform act is proving to be an effective impediment.

The Unfunded Mandate Reform Act of 1995 (UMRA, Public Law 104-4) was the first (and only) item in the Republican Contract With America signed into law. Now in effect for six years, Congress' record on unfunded mandates to states and local governments is mixed. Although relatively few bills meeting the definition of unfunded mandates have passed, UMRA offers state and local governments little protection from costly and burdensome conditions of aid, or strings attached to the receipt of federal funds. This article describes what UMRA is and assesses the law's performance thus far in curbing unfunded mandates.

A Little Background

Two political changes occurred in the early 1990s that made UMRA possible. The first was the emerging solidarity of state and local government interest groups in opposition to unfunded mandates. In the recent past, state and local interest groups were reluctant to challenge Congress on mandates because the policies being mandated often enjoyed popular support. Other times they actually welcomed the "floor" of a federal mandate for an unpopular program to curb any "race to the bottom" impulse states might have to decrease funding for unpopular programs. And sometimes the mandate seekers were state agencies and local departments themselves, pressing for federal requirements to provide services that states were reluctant to fund.

The unprecedented unity of state and local government interest groups can largely be attributed to two factors: realism and fear. First, these groups accepted that their strategy of conceding the mandates and then asking for more money was not working; it had not worked in a decade, and it was very unlikely to work in the foreseeable future with the federal budget running a deficit. Second, an emerging conservative coalition in Congress seized on the Reagan proposal of devolution of responsibility for services to the states and was targeting welfare as the first program to devolve. The attention of the government interest groups was quickly concentrated on the prospect of receiving responsibility for an expensive, unpopular program aimed at an intractable problem. The interest groups sought common ground in response. They pressed a fairly simple conceptual idea as a solution: no money, no mandate. That is, state and local compliance with federal mandates enacted without funding would be voluntary. Various ve rsions of unfunded mandate reform bills with this theme worked their way through committee, but none ever came close to passing.

A few blocks away, the Supreme Court was gently signaling a shift in its position on federalism. Court watchers noted that the decision in Gregory v. Ashcroft [111 S.Ct. 2395 (1991)] was remarkable in the extent to which the majority opinion written by Justice Sandra Day O'Connor advanced federalism arguments to justify the exemption of two Missouri judges from the Age Discrimination in Employment Act (Public Law 90-202). Similarly, in New York v. United States [488 S.Ct. 1041 (1992)], Justice O'Connor invoked a 10th Amendment argument to restrict the national government's power to force a state to "take title" to nuclear waste produced inside its borders. Later, in U.S. v. Lopez [115 S.Ct.1624 (1995)], the Court restricted Congress' ability to preempt state authority by unsubstantiated claims that the activity being regulated amounted to commerce, an enumerated federal power. The Court reiterated its position two years later by finding that Congress' argument that the provisions of the Brady Bill, which imp osed a duty on state officials to conduct background checks on gun buyers, did not meet the standard for interstate commerce [Printz v. United States, 117 S.Ct. 2376 (1997)].

But it took a classic political "swap" to get unfunded mandates legislation the support it needed for congressional action. The new Republican majority created by the midterm elections of 1994 championed a balanced budget amendment as the solution to the federal deficit problem, and the idea enjoyed wide public support. However, as constitutional amendments require ratification by the states, the cooperation of governors and state legislatures would be essential to the success of any balanced budget amendment. The newly unified...