Until January, the federal government and the states had a mutually beneficial and straightforward deal: The federal government prioritized challenges requiring national solutions — e.g., national security, natural and public-health disaster relief, managing the American economy. For their part, the states delivered primarily local goods and services — Medicaid and Medicare, much of our transportation infrastructure, public education.
Money, specifically taxpayer money, underpinned this deal. In 2023, the federal government collected about $4.7 trillion in taxes, sending back about $4.6 trillion to the states, mainly via social service programs. (The remainder of that year’s roughly $6 trillion in federal spending was mostly financed by debt.)
Now, this deal between Washington and th