WE NEED AN INDEPENDENT NATIONAL SYSTEM OF PUBLIC HEALTH

When it comes to addressing the pandemic, the federal government gets a grade of D- on its public health policy and a B+ on its monetary policy to help the economy. In explaining the poor grade on public health the daily news cycle has rightly focused on the absence of presidential leadership.  However, there is an underlying constitutional issue that must be considered, in conjunction with Trump’s mismanagement, when evaluating the nation’s response to the virus.

In my view, Republican and White House interpretation of federalism and the 10^th Amendment have adversely affected our public health response to the virus.  Conversely, the Federal Reserve was able to act without the constraints of federalism and received high marks for making decisions on monetary policy that were well timed and beneficial.

Under the 10^th Amendment to the Constitution: “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectfully, or to the people.” This form of government that calls for sharing of power by federal-state elected officials is known as federalism. 

From America’s founding until the time of the great depression in 1933, all levels of government were small by modern standards.  With the exception of war (including the civil war) and tariff policy, the states controlled most decisions important to its citizens. When faced with power sharing issues, the federal courts often invoked the “police power” granted in the 10^th Amendment, to provide the states with authority greater than the federal government.

From the great depression through the 1970s, all levels of government expanded their scope of governance to keep pace with industrialization and globalization.  However, more power shifted to Washington as the federal government took on new responsibilities commensurate with modernization.  To skirt the limitations of federalism, federal courts began citing the Commerce Clause of the Constitution (Congress has the right to regulate all commerce among the states) as justification for federal intervention. This approach was successful in nationalizing the law on everything from child labor laws to civil rights to Obama Care.

In recent years, the pendulum on federalism has swung back toward the states.  The Republican Party under the sway of ultra conservative elements has fully adopted the position of one of their revered leaders, President Ronald Reagan. He proclaimed: "The nine most terrifying words in the English language are: I'm from the Government, and I'm here to help.” 

As a result, Republicans have fought to keep important issues like education, health care, public assistance and public health, firmly under state and local jurisdiction. Conservatives who favor small government know that the states must balance their budgets and have limited resources available for addressing these important societal needs.

There is not enough time or space to discuss all the ways in which the Trump administration managed to bungle the pandemic response.  For purposes of this discussion, he has often pointed to federalism and state responsibility in order to absolve his administration from tough decision making.  He made a political calculation that “red” state governors would  shut down economic activity slowly and open quickly to aid his reelection.  Moreover, if the states failed, he could place blame on the governors.

Other democratic nations, with national top-down decision making and no federalism to fall back on, took the opposite approach. These responsible leaders centralized efforts to close their entire countries early in the outbreak. They did not reopen until the curve of new cases was broken and further outbreaks manageable.  America is now in a very different place. Acting on their own, the fifty states resemble “whirling dervishes” creating mass chaos and dysfunction.

As a counterpoint to this public health melt-down, the Federal Reserve System (the Fed) has acted in spectacular fashion to effectively address the financial crisis of 2008 and during the current pandemic.  The actions taken in March include cutting the federal funds interest rate; purchasing massive amounts of securities; direct lending to banks with a temporary relaxation of regulations; supporting loans to small, medium size businesses and non-profits; and direct lending to state and municipal governments.

Through these bold monetary actions taken by the Fed a major economic disaster was avoided.  Unfortunately, if America is forced into a second extended shutdown because of the mismanagement of the first, the Federal Reserve’s ability to repeat its monetary rescue mission is limited.

The Fed was created by an act of Congress in 1913.  It is governed by a board of governors appointed by the President. The Fed received a mandate from Congress to remain an independent entity of the federal government, insulated from undue political pressure or short term political considerations. The mandate has worked well to ensure that the Fed can effectively pursue its statutory goals based on objective analysis and data.

The past few months make it abundantly clear that it is time for Congress to create an entity similar to the Fed to provide central control over public health emergencies.  Existing federal departments and agencies with public health responsibilities report directly to the President and have lost all credibility in addressing pandemics.  Our recent national health crisis is no different from a monetary crisis. One independent entity is required for public health.  Politicized mismanagement under the guise of federalism must never be repeated.