I was just revisiting this thread and saw your post. I think it is insightful and an opportunity for the GOP. We didn’t just get here with Obama’s election. Government has been growing for a century and accelerating as we go.
The GOP could block grant a lot of the federal budget back to the states for their use...and leave it open ended. They can spend it on entitlements or pay down debt or reduce state taxes, etc.
They could also target “redundancy” by allowing states to enforce some regulations thereby eliminating centralized, national control and improving federalism - competition between the states.
What do you think?
Block granting the money back to the states still results in redistribution. I can see the arguments both ways. On the one hand: White flight, Rustbelt flight, Sunbelt flight, urban flight, whatever, is unfair to the people left behind who can't flee. Therefore the federal government must tax the rich states to preserve the poor states. On the other hand: the destination states have pro-growth policies that attract those willing to work, have favorable tax policies that let workers keep more of their earnings, have right to work policies that attract business, have Republican leadership.
The GOP has a terrible time making these arguments.
I can't imagine the federal government ceding redundant powers back to the states to perform locally for two reasons: 1) they would have to cede the funds back as well for the states to afford it, 2) the federal government today is suing states to stop redundant efforts. Redundancy ultimately leads to political conflict.
The radical alternative is to drastically cut federal taxes and let the states increase state taxes, concurrent with a reduction in federal services that would now be assumed by the states. The natural Leftist argument is that it is just tax cuts for the rich. The Right argument should be that is pays for the localization of government services, but the governments providing the services are the states, not the feds.
The Left would then fall back to my first point that states like Michigan with cities like Detroit could never survive on their own without federal aid, while the Right would say that it was Democrat rule that killed the state in the first place and caused its citizens to flee. Again, the GOP would be terrible at making that argument.
Finally, the Left wants "equal protection" in all things, including state character. They want Texas to be like New York, Florida to be like California, Utah to be like Oregon. The thought that someone in Utah some day might not be able to get an abortion without having to travel to Oregon is horrifying to them, even if they never set foot in Utah in their entire lives. The thought that Texans might keep their earnings in Texas to be spent locally by Texas politicians is equally horrifying.
Today, Senators from California, Oregon, and New York can dictate spending in Utah, Texas, and Florida. The poor states are actually stronger when they band together as a national party bloc that can raid the rich states, through the people electing Senators who will toe the party line. I can't imagine states taking a predatory view towards other states if their Senators were appointed by their respective legislatures.
-PJ