Thursday, April 2, 2020

US Senate Apportionment and the Distortion of Federal Spending

I don't need to waste words describing how terrible the Coronavirus Epidemic is for the United States and how it is likely going to end the lives of tens of thousands of people.  I don't need to waste words  about how quarantine attempts to slow Coronavirus's spread has shut down the US Economy, decimating state and local finances and wrecking lives.

What I want to write about here is how sickeningly unjust the apportionment scheme of the US Senate makes the distribution of federal relief money and how the US Senate's idiotic rule of two-Senators per state means that residents of low-population states are getting DRAMATICALLY more federal assistance than residents of large-population states.

At the Constitutional Convention, all of the major Founding Fathers, including Hamilton, Madison, and Franklin, supported allocating Senate seats by population, since the intention was to form a republican government, a term which then meant majority rule, but in contradistinction to the direct democracy of Athens..  Hamilton called the notion that the states were equal "sophistry."  Madison said a Senate with equal-by-state representation "shocked every human feeling and justice."

It was only by blackmail by small state delegates, such as Gunning Bedford, Jr of Delaware, to re-invite Britain back into the colories, "the small ones would find some foreign ally of more honor and good faith, who will take them by the hand and do them justice" that induced what we unfortunately call the "Great Compromise," where the weaker chamber, to be known as the House of Representatives, would be allocated by population, and the more powerful chamber, to be known as the Senate, would be allocated on "equal suffrage."

Opponents of "equal suffrage," such as Franklin, Hamilton, Madison, James Wilson, George Mason, and even George Washington eventually accepted having two states per Senators, but the country they imagined was basically a free trade zone with an army. They never imagined the sprawling federal government we have now, where the federal government would have the primary fiscal responsibility for citizens' welfare, and even extend to areas like healthcare and education, which at the time barely had any governmental involvement at all.

And so this brings us to 2020, the Coronavirus Epidemic, and the Coronavirus Relief Act, whose $150 billion relief package for the states is as follows:

The $150 billion in the Coronavirus Relief Fund is mostly allocated by population, but with $3 billion reserved for U.S. territories and the District of Columbia and $8 billion set aside for tribal governments, along with a guarantee that each state receives at least $1.25 billion even if its population share would otherwise indicate a lesser amount.

Here's how the money breaks out.

July 2019 PopCoronavirus MoneyCoronavirus Money Per CapitaExtra Money or Lost Money Compared to Allocation by Population
North Dakota762,062$1,250$1,640$905,547,976
South Dakota884,659$1,250$1,413$850,134,132
Rhode Island1,059,361$1,250$1,180$771,168,828
New Hampshire1,359,711$1,250$919$635,410,628
Puerto Rico3,193,694$2,241$702$797,450,312
District of Columbia705,749$495$701$176,001,452
West Virginia1,792,147$1,250$697$439,949,556
New Mexico2,096,829$1,250$596$302,233,292
North Carolina10,488,084$4,067$388-$673,613,968
New York19,453,561$7,543$388-$1,250,009,572
New Jersey8,882,190$3,444$388-$570,749,880
South Carolina5,148,714$1,996$388-$331,218,728
There is nothing unusual about the Senate forcing the House to accept unfair distribution of federal spending.  This is how federal block grant formulae typically work for ordinary expenditures in education, state grants etc. What is only unusual is the severity of the crisis that the Coronavirus Relief Act responds to.

The same ripoff is happening with Education Stabilization Fund moneys.

There is also a gratuitious deprivation of large cities of their fair share of Coronavirus Relief money.
Local governments with populations of 500,000 or more are also eligible for aid, and any aid they receive is subtracted from the amount otherwise available to their state’s government. This too is apportioned by population, but localities may only receive 45 percent of the amount associated with their population. 
By way of explanation, consider Chicago, with a population of about 2.7 million, representing about 21 percent of Illinois’ total population. Illinois is eligible for up to $4.91 billion in funding under the Coronavirus Relief Fund (see table below), and $1.33 billion of that is associated with Chicago’s population. Chicago, however, cannot claim all $1.33 billion. The city can claim 45 percent of it, or about $600 million, which would come out of the state’s cap.

Although Chicagoans would be eligible for state services, what is happening is that Chicago has 21% of Illinois' population, but it can get 12.2%, or $600 million, of Illinois' Coronavirus Relief Money.  If Illinois also distributes money to non-Chicago localities, Chicago is getting ripped off.

New York City has 44% of New York State's population (8.6 million out of 19.5 million), but it can only get 45% of its 44%, or 20% of $7.54 billion, or $1.5 billion.

This actually isn't the worst malfeasance of the Senate.  Here every state was guaranteed at least $1.25 billion, but sometimes the formula is that every state gets at least 0.5%, and then, after 25% of the money is allocated that way, is a population-based allocation used.

The US Constitution is THE Problem

Many Americans are cynical about our government, about political outcomes, about waste, about corruption, but the tendency is always to blame our politicians themselves, or the media, or donor interest groups.

Politicians, the media, and donors are responsible for a lot of our dysfunction, but the Constitution itself is also a major problem is its numerous veto points, creation of an overly powerful executive branch, overly powerful Supreme Court, exceptional rigidity against amendment, and grotesque maldistribution of power between different groups of America depending on arbitrary lines drawn on maps known as "states."

Also, just as the original US federal government had very few functions compared to today, we must also remember that the inequality of the Senate was not as severe in 1787 as today.  In 1787, states with a third of the population elected half of the Senate, now states with 16% of the population do.   In 1787, Virginia had twelve times the population of Delaware, now California's population is about 70 times that of Wyoming.

The so-called "Great Compromise," was neither great, nor a compromise.  The constant unfair distribution of federal spending is just one of the many unequal consequences we get from equal representation.


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