In the following two sections, I consider generalizations concerning federal parameters and state capacity constraints that can be drawn from the TANF and SCHIP analyses.
Discretion
Federal parameters placed limits on state discretion in TANF and SCHIP policy choices. Across the board, states demonstrated a willingness to engage strategically with these parameters, seeking waivers to relieve restrictions where possible and manipulating program structures to comply with federal performance metrics as necessary.
Variation between state SCHIP programs was extensive, but the need to obtain waiver approval for certain policy choices nevertheless limited policy trajectories to an extent. Relative to TANF, SCHIP contained more narrowly defined objectives and recipient populations.
TANF’s broad policy objectives permitted states to designate funds for a variety of purposes and seemed to promote a proliferation of state programs to assist with childcare, transportation, housing and employment services for the TANF population. Both before and after the DRA, states manipulated funding provisions to maximize federal financial participation, even though such strategies provoked restrictive federal parameters in subsequent periods.
Capacity
Results of the TANF and SCHIP analysis support the claim that variation in state- level capacity constraints orients divergent state policy trajectories. Comparing the
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details of four states’ experiences reveals distinct configurations of state-level capacity constraints that profoundly influenced the sequence of policy choices for each state. Fiscal Capacity
Fiscal constraints feature prominently in state policy choices in the TANF and SCHIP block grants. The California experience, in particular, emphasizes the extent to which relatively progressive social policy trajectories are responsive to fiscal constraints. In California, fiscal conditions eclipsed all other considerations as the budget crisis deepened, forcing the state to reverse course and even prompting the governor to propose eliminating the state’s SCHIP program.
Fiscal constraints stemming from periodic recessions produced different
responses in the states. In the first recessionary period, unspent reserves moderated fiscal constraints and non-binding federal parameters left states more room to maneuver. Some states were able to continue investments in SCHIP and TANF, in particular. The severity of the second recession, compounded by non-existent reserves and tightened federal parameters, elicited a more uniform response from the states. Only federal intervention moderated TANF and SCHIP budget reductions.
Focusing on the fiscal dimension highlights several generalizations based on the SCHIP and TANF experiences. First, as discussed above, states responded differentially to block grant programs that increased, rather than decreased, demands on state
resources. The distinction resurfaced in subsequent budget negotiations, magnified partisan divisions and oriented state policy responses.
Second, the financing provisions structured in the original policy instrument were key in shaping state responses. Matching rules, time limits on reserves, MOE
requirements and compliance with federal performance metrics delimited state policy choices. States demonstrated a willingness to manipulate funding provisions, to an unexpected extent, to optimize federal financial participation, even though such strategies were likely to provoke restrictive federal parameters in subsequent periods.
Third, the inability of state budgets to weather severe economic conditions underscored the importance of counter-cyclical funding provisions in social programs. SCHIP did not contain such measures and TANF’s contingency fund (which Clinton had fought to double to $2 billion in the 1996 PRWORA legislation) was insufficient to protect against a severe decline. Absent these provisions, additional federal support was provided via CHIPRA and ARRA legislation in 2009 to avert major cuts in state-level funding for these and other social programs. The necessity for federal intervention highlighted the ongoing financial dependence of the states in a federal system. This relationship may be obscured in times of growth and state budget surpluses, but to an advanced degree, state fiscal capacity relies on federal support (Zelman 2009). Political Capacity
Focusing on political capacity, there are a number of interesting phenomena to consider. First, the differences in state-level political culture that have been assessed by numerous typologies continuously exert pressure on state policy choices, sometimes in unexpected directions. Ohio’s relatively conservative political environment still
produced a moderately progressive policy regime. Consequently, partisan composition of state level political offices seems an unsatisfactory measure of ideological differences. Defying measurement, those differences were nevertheless at the root of variations in
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state inclinations to assist the distinct SCHIP and TANF recipient populations and in state perspectives on the proper role of government in those efforts.
Second, state discretion in prioritizing policy objectives diffused partisan
disagreements to a greater extent than simply allowing states to determine eligibility and other program details. At the federal level, the broad policy objectives that oriented state TANF choices seemed to leave sufficient flexibility for state legislators to reach political compromises. States could appease a spectrum of political constituencies, for example, by tempering more stringent work requirements with more inclusive childcare subsidies.
This presents an interesting contrast to the SCHIP case in which policy options were limited and partisan divisions more distinctly delineated. As discussed above, progressive legislators could advocate to offer coverage to families at higher levels of the federal poverty level or provide additional benefits (dental, vision, etc.). Both of these trajectories met with ideological opposition. Many states experimented with cost-sharing mechanisms and measures to reduce crowd out of private insurance, but such steps did not alleviate the underlying objection of some legislators to an expanded government role in healthcare.
Structural Capacity
A range of state specific characteristics, including demographic profiles, state constitutional constraints, and budget approval procedures yielded substantial differences in policy trajectories. Though this analysis included in-depth analyses of only four states, the diversity and complexity of structural constraints that surfaced in each case suggests the possibility of additional structural variations in the other forty-six states.
In addition to state-level structural distinctions, the tendency for states to devolve program administration to the counties introduces another source of constraints on state policy choices. This was particularly pronounced in the case of TANF. Basic state TANF provisions are usually stipulated in state law (including funding levels, eligibility standards and benefit definitions), but in many states a subset is left up to the discretion of county-level implementing agencies. In several of the states reviewed, counties made the eligibility and exemption determinations. In some cases, the counties not only administered the programs, they were responsible for partial financial support and accountable for meeting federal performance metrics.
As TANF transitioned from the former welfare orientation of AFDC to a focus on welfare and work, program administration was sometimes divided across human services and employment agencies. In Texas, cash assistance was administered by the state’s Health and Human Services Commission while employment services were managed by the Texas Workforce Commission. Divided responsibilities imply separate decision- making processes and considerations that are marginalized in a state-level analysis. The distribution of TANF policy making across state and county level, human services and employment agencies introduces a complex configuration of decision points.
Interconnected Constraints
Though I separate the discussion of federal parameters and capacity constraints into distinct subsections above, I do not intend to misrepresent the degree to which these factors are deeply interconnected and mutually reinforcing in a federalist system. These relationships connect federal-level parameters and state-level constraints, as well as different categories of state-level capacity constraints. Though I have attempted to
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differentiate between politically-driven fiscal constraints and fiscally-driven political constraints in the Texas and California SCHIP case studies, this distinction is difficult to defend definitively and the relationship between political and fiscal considerations is hard to disentangle.
As discussed in earlier chapters, this is a feature of federalist systems, which are, by definition, political and fiscal in nature (Pierson 1995). The discretion-capacity framework was proposed as an alternative to variable-driven research that could accommodate the interconnected constraints inherent in a federalist system. However, the framework required a different set of simplifications and assumptions—a