The Influence of Obamas Policies on Federalism - Essay Example

Abstract

The policies developed by President Obama have the capacity to change federalism in the United States in ways comparable to the Great Society of President Lyndon Johnson. The government’s policies on issues such as health care, energy conservation, and financial reforms are promising to significantly impact intergovernmental relations. The government has increased the federal aid given to states, and with it have come strict requirements for accountability. Throughout this paper, the influence of Obama’s policies on intergovernmental relations will be analyzed. This will give an overview of how these policies are likely to shape American federalism in the future.

Research Question: How have the Obama policies influenced intergovernmental relations in the United States?

Hypothesis: The Obama administration has developed a wide range of policies on key sector of the economy that will positively enhance the interaction between federal, state and local governments.

The Influence of Obama’s Policies on Federalism

The American federal system, which separates authority between the state and national governments, is a governance system that defines the American society. Throughout the history of America, the success of federalism has greatly been influenced by the policies adopted by the sitting president (Letendre, 2013). These policies make intergovernmental relations flourish or fail. In the present paper, the focus has been given to the policies developed by President Obama and how they have influenced federalism. Although it is not possible to exhaustively analyze all the policies under the Obama presidency, this paper highlights the major policies and the role they have played. Specifically, the paper will review the policies developed in the health care sector, financial sector, the environment and fiscal policies.

The Health care Reform

In 2010, President Barrack Obama signed the Patient Protection and Affordable Care Act (PPACA) into law. This healthcare reform is the most ambitious to be adopted since the 1960s. The full implementation of the law will be completed in 2019 (Béland & Waddan, 2013). This legislation is one that is likely to have a significant impact on federalism in the United States. The contents of the PPACA are likely to impact the relationship between the federal and state governments. The PPACA increases the involvement if the federal governments in the American private health care system. This involvement has a direct effect on the relationship between the federal and state governments. Because the PPACA is aimed at increasing coverage of Medicaid, all the states are required to manage this expansion (Béland & Waddan, 2013). The cost of the expansion is expected to rise from $21 to $43 billion between 2014 and 2019 (Conlan & Posner, 2010). Although the federal government will provide the funding for the increases, state governments are likely to incur the costs in the following years. Fortunately, despite the costs, this program will offer benefits to states as well. For example, it is estimated that between 2014 and 2019, states could save up to $80 billion by channeling Medicaid funds to the near poor and the uncompensated care funded by these states (Conlan & Posner, 2010).

The states also have major regulatory responsibilities in ensuring that the reforms in the healthcare sector work. For example, state governments are required to develop the laws that will govern the plans participating in exchanges. Among other things, States are required to develop a rating system that will allow consumers to compare the performance of the various plans (Conlan & Posner, 2010). Overall, state governments are required to work with the federal government in setting of these regulations so as to ensure that they adhere to the state laws and standards.

Overall, it is clear that the healthcare reforms initiated by President Obama, especially through the PPACA, will have significant impacts on the intergovernmental relations. The implementation of the PPACA, for instance, is one that has been resisted by a majority of the Republican-ruled state governments (Béland & Waddan, 2013). In the end, this will increase the federal government’s direct involvement in the implementation of the program. The federal government provides financial incentives to those states that participate in the expansion of Medicaid. These financial incentives will greatly determine the level of involvement by the state governments in the health care reform.

Obama’s Fiscal policies and economic reforms

The reforms instituted by President Obama in the financial sector have also been of significant impact on the federalism. The policies that have been developed by his administration have had far reaching consequences on the way the federal government relates with the state and local governments. Block grants have been a major feature of the Obama administration. Block grants are simply a form of a grant that the federal government uses to provide the state and local governments with specific amounts of funding. The grants and financial aid offered to state and local governments have been steadily increasing (See Appendix 1). The Obama administration has significantly increased this funding by providing states with more money. The American Recovery and Reinvestment Act (ARRA) increased the fiscal stimulus given to states as a way of responding to the Great Recession. Compared to another previous stimulus, the ARRA offered to state and local governments with higher sums of money. About a third of the $787 billion stimulus funds of the ARRA went to or through the States (Gais, 2010). For example, $63 billion of the package was set aside for infrastructure projects, with $28 billion of this going to state governments (Gais, 2010). The most interesting aspect of this stimulus package is that it serves many functions, including assisting those who had not found jobs, infrastructure projects and assistance to the hard-pressed state and local governments. The ARRA also put conditions of accountability to state and local governments. The Obama administration demanded that this stimulus package be spent quickly but with a high degree of accountability and openness. This pushed elected leaders from all the three levels of government to work with each other in a collaborative manner (Conlan & Posner, 2010). This further illustrates how the program helps enhance the relationship between federal, state and local governments. Just like other programs, this one is also based on the ‘carrot and stick’ principle where funding provided by the federal government carries rewards and punishments to the receiving state and local governments.

The federal government has also made great improvements in the export sector, and this has had a major effect on the economy, directly affecting state and local governments. The ability of the private sector to export has been improved by removing barriers that limited its capacity to export. In 2010, the National Export Initiative was announced by President Obama during the State of the Union address. This initiative was aimed at reviving the country’s efforts to promote American exports in other countries (See Appendix 2). The growth in export has affected federalism by increasing job opportunities. Data collected in 20102 showed that 29 states increased their export levels to a record high (International Trade Administration, 2012). Not only do these high export records indicate growth in the economy but also indicate an addition to jobs to the economy. This shows how the policies developed by President Obama have significantly enhanced federalism in the United States, with federal policies greatly influencing the state and local governments. Overall, Obama’s efforts in the economic and financial sector have helped in enhancing innovation and recovery efforts and the state and local governments (Conlan & Posner, 2010). This has in turn made elected leaders at federal, state and local levels to work together, thereby enhancing federalism.

Environmental Policies

Under the leadership of President Obama, environmental issues shave assumed an intergovernmental approach, with policies being developed aimed at enhancing the intergovernmental cooperation. In 2009, the president declared that there was an intergovernmental agreement on fuel efficiency and reduction of greenhouse gas emission from the transportation sector (Rabe, 2011). The policies developed by the president have focused on the intergovernmental conflicts that have for a long time hindered the efforts to deal with climate change. In order to deal with such conflicts, the president has on many occasions turned to the administrative tools to attain his goals. In general, the president has prioritized climate change and environmental issues as an important agenda. States have thus been made to adopt policy measures to adhere to the federal directives on the environment and climate change. For example, the renewable portfolio standard (RPS) has been adopted by various states throughout the country. The RPS is a requirement that a certain amount of electricity generated by a regulated power provider to be obtained through renewable sources (Konisky & Woods, 2016). Under the leadership of Obama, states have come up with policies to adhere to RPS. For example, California is one of the most ambitious states on this standard by setting it a 50% by 2013. Hawaii and Vermont have also set targets of 100% renewable by 2045 and 75% by 2032 respectively (Konisky & Woods, 2016).

The regional Cap-and-trade Programs form another area of policy developed by the federal government that has been adopted by state governments. The policy mainly focuses on greenhouse emissions. Under Obama’s presidency, for example, Connecticut, Delaware, Massachusetts and seven other northeastern states adopted the Regional Greenhouse Gas Initiative (RGGI) aimed at capping carbon dioxide emitted from large power plants (Konisky & Woods, 2016). On the same policies, a number of western states, including Montana, New Mexico, and Utah adopted the Western Climate Initiative (WCI), whose scope involves economy-wide emissions (Konisky & Woods, 2016).

Under the Presidency of Barrack Obama, the federal government has come up with policies related to climate change and the environment which have in turn been adopted by states. This has increased intergovernmental relations and cooperation.

Reforms in the Financial Sector

Federalism has greatly benefited from financial sector reforms implemented under the leadership of Barrack Obama. This has been achieved mainly through the Dodd-Frank Act whose main focus has been on the reforming of the authority and structure of federal financial regulators (Metzger, 2011). Under the Dodd-Frank Act, for instance, a Financial Stability Oversight Council (FSOC) is created whose main aim is to identify and respond to various threats to the instability of the financial system in the country (Metzger, 2011). Also, the FSOC focuses on important firms that are in danger of defaulting. Although the regulation of the financial sector through the Dodd-Frank Act appears to be primarily the responsible of the federal government, state governments have an important role to play as well. In the FSOC, three chief state officials are represented as non-voting members: banking sector supervisor, securities commissioner and the insurance commissioner (Metzger, 2011). This is another clear illustration of how the leadership of Barrack Obama has enabled for enhanced intergovernmental cooperation. Under the Dodd-Frank Act, the states have a key role to play in two major areas- insurance regulation and the consumer financial protection (Metzger, 2011). For example, in the area of consumer protection, states continue to play a major role, especially on issues touching on mortgage abuses. States have benefited greatly from the financial sector reforms because they have a direct view of the financial developments that happen in their jurisdictions. States have a chance to work with federal officials in regulating the financial sector and taking active roles in protecting consumers and enhancing the effectiveness of regulatory bodies.

Brief Analysis

Based on the examples above, it is clear that the Obama administration is playing a critical role in enhancing intergovernmental relations. Policies developed in various sectors, including health, environment and finance, present state and local governments with real opportunities to interact with the federal government. The intention of the president in fostering these relations became clear early in his presidency when he launched his presidency. In 2009, the president convened the nation’s Governors in a meeting held in December in Philadelphia. His administration clearly understands the dependence of the federal government on the states, and this has pushed the reforms that are currently being implemented. More importantly, states have an increased degree of flexibility in developing their own policies to adapt to their circumstances. For example, under the American Recovery and Reinvestment Act (ARRA), a half of the funds delivered were on highly flexible terms that allowed states to adjust budgets based on their circumstances. It is worth pointing out that although states continue to benefit from these policies, resistance is still witnessed in some areas. The friction between the federal and state governments on key issues, especially those relating to health care reform need to be addressed. For example, the PPACA is one that has faced resistance from various governors in some states throughout the country. Most have argued that the PPACA regulate these states in a manner that undermines their sovereignty (Joondeph, 2011). It is clear that these are some of the key issues that could derail the federalism gains made under President Obama. Given that states face major financial constraints, it is not strange to observe that the Obama administration has been exploiting on these financial woes to push states to implement various policies (Greenblatt, 2010). Although some may see this as pure exploitation, the overall effect is that it enhances intergovernmental cooperation. It is important that there are clear guidelines and proper flow of information between the federal, state and local governments in order to enhance the success of these policies and promote federalism.

Conclusion

During his two terms as the president of the United States, President Obama has come up with key policies that touch on critical areas such as the economy, climate change, and health care. Although some of these policies have not been as successful as expected, it is fair to note that a majority of them have been successful. From the onset, the president realized the important role played by state and local governments in supporting the policies of the federal government. Throughout his policies, the president has given the state and local governments a chance to work with the federal government. These policies have enabled for a clear and profitable intergovernmental collaboration. Although some difficulties are encountered, the Obama presidency has tremendously improved federalism. Going into the future, it is necessary to develop clear communication of policies and their requirements to the state and local governments in order to minimize resistance to their implementation.