Governor Michael O. Leavitt

A year and a week ago, we gathered in the afterglow of an American style revolt. We did so, at the site where another revolution was planned 217 years earlier by a group of Virginia patriots, Williamsburg. Before dawn on the third day of our conference, I walked the historic section of that township with then Speaker-elect, Newt Gingrich. Newt is by training and instinct, a teacher and historian. It was a rich experience to listen to his commentary. As we walked past the House of Burgesses he told me how the colonial Governor refused to have any discussion of revolution there, so the group, which included Washington, Madison and Jefferson, marched together to the Bruton Parish Church and then on to the Raleigh Tavern. The two of us walked the same path. As we paused at the church it was still dark and a low-hanging fog gave the morning a mystic, almost dream like feel. It made you feel like James Madison might just step out of the mist any second.

As we walked, we talked about the birth of a new nation born of bloody sacrifice in places like Lexington, Valley Forge, and Bunker Hill. We talked about how the colonies became independent states, and loosely joined themselves together, under a document called the Articles of Confederation. And while their hopes and aspirations were high, frankly . . . it was a mess. The national government was just too weak and it simply wasn't working. George Washington said the states were held together by a "rope of sand." The country staggered under a sixty-million dollar war debt. With no national tax system there was no means of repayment. Three different states were claiming part of Vermont. There was no national court system to resolve the disputes. Trade barriers and a fragmented monetary system strangled the economy. To foreign powers, this was no nation, just a group of small rebellious sovereigns not to be taken seriously. Something had to be done; the nation was floundering.

In May of 1787, a group of state legislators and citizens gathered in Philadelphia for a Constitutional Convention. With George Washington as chair, 55 delegates met for four hot, sweaty months behind closed doors. Their deliberations were the most important public policy discussions in the history of Western civilization. Two major issues emerged. First, balancing the interests of big states and small states. They resolved that with the Great Compromise. Two houses of Congress, one apportioned by population, the other by state. The second issue was tougher and absolutely fundamental to the very existence of the Republic. What would the relationship be between the states and the national government? Would this new government be dominated by states or would a centralized national government be superior, dictating to the states?

Most of the delegates knew the failings of a government dominated by states. They had seen firsthand what a misfire the Articles of Confederation had been. But having just won their freedom from tyranny, they were wary of turning the regulation of their lives, fortunes and families to a faraway central government. This state/national issue brought the convention to the brink of collapse. At the last moment, a brilliant solution was produced. The delegates used the same commonsense approach my mother taught me.

I grew up in a family of six boys. It wasn't unusual for a couple of us to fight over the last piece of a dessert. So mother would say, "Mike, you cut the pie and Dane, (my brother) you choose first." I would cut the pie with scalpel-like precision, knowing full well that if either of the pieces was bigger than the other, my brother would take it. Around home we called that method "Mothers Rules. "Mothers Rules created a near-perfect, self-enforcing equity. It was elegant in its simplicity, brutally fair and absolutely effective. (I have amused myself at times trying to imagine the volumes of regulations that federal bureaucrats could write on how to fairly split up a piece of pie.)

The Constitutional Convention delegates applied their own version of Mothers Rules. They created two governments. First, a national government with a list of explicit, delegated responsibilities; things like national defense, foreign policy, interstate commerce, coining of money, and so forth. In those limited areas, the national government would be supreme; limited, but supreme. All powers not given to the national government the overwhelming majority would remain with the states and the people.

"Limited, but supreme" vs. "all other powers" was the founders' version of Mothers Rules. If either the national or state government began to encroach on the other, or failed to perform, the founders believed the other would immediately react and the "people would be protected." They expected the careful balance they created would be self-enforcing. There were lots of skeptics. But it has endured more than 200 years. The United States of America has prospered. This is the most powerful nation on earth. It has survived a Civil War, conflicts with foreign powers and two centuries of dramatic change. Most important to us today, it is the ideal form of government for the information age of the new millennium.

When our walk was over, I returned to my room to dress for our meetings. I couldn't help but wonder, if the founders had somehow magically stepped out of the fog, what they would say about the condition of this country? What would they say about a $5 trillion national debt? What would they say about a country unwilling to balance its budget for 40 years? What would they say about the volumes of federal laws prescribing in great detail how every state, city, town, village and hamlet conduct the most uniquely local tasks? What would they say about the staff assistants of assistant deputy undersecretaries of federal departments who think their real job is to double as a state health director, chief of police, or local road superintendent? I think they would undoubtedly ask why it took until 1994 for the people to react. They would say, "this government is seriously out of control and you'll never fix it until you balance your budget and get the national government out of things it is incapable of doing well." Well, Madison, Jefferson and Washington weren't at our meeting that day in Williamsburg, but Newt Gingrich, John Kasich, Bob Dole, and Pete Domineci were.

That day in Williamsburg, history was made again. Thirty Republican governors and the new Republican leadership of Congress formed a new partnership to do just that, balance the budget and return responsibility to the states. For 40 years previous, states had been relegated to writing letters to their congressional delegations and occasional trips to Washington, D.C. to lobby Congress. That's not our role. States weren't intended to be lobbyists. States aren't special interests. States were intended to be full constitutional players; a counterbalance to the national government; the protector of the people. That was a day I will not forget.

January 6 of this year is another day that will live long in my memory. It was the day eighteen of us sat around a table at the RNC with congressional leaders. That was the day the welfare task force first advanced the idea of block grants. The proposition was simple. Give the states total flexibility to manage the programs and we would accept flat funding for 5 years. "What about Medicaid?" someone said. "We're willing to explore a similar idea," was the reply. "We could never level fund Medicaid, it will need to grow, but we could cut the rate of growth dramatically, if you'll set us free to use common sense and innovation." It was an exciting moment. You could feel the energy in the room. "How much would you save if you did that," somebody asked. Numbers were flying, people scrambling for phones to call budget staff. John Kasich was pacing the floor and suddenly stopped, grabbed his hair with both hands and said, "If you can make this work, it's the missing piece. We can balance the budget." That day set the direction. We marched downstairs with a huge poster with the tenth amendment written on it and announced our "new partnership" to the world.

For Congress, this has been a tough, grinding year. For the governors, it's been a blizzard of conference calls, continual trips to Washington, formulas, faxes and frustration.

But last Friday, Congress passed a balanced budget. It is not perfect from a state perspective, but it will work. With the flexibility in this package states can begin streamlining welfare, reforming job training and fixing Medicaid. I am mindful that the bill can only become law with the president's signature and that during the next 30 days we must be focused and vigilant. It is all on the line for states.

Today, I conclude my service as chairman of this organization. In doing so, I would like to register a serious and sobering concern. I believe Congress and the president will succeed in negotiating a balanced budget on a seven-year path. The signing of that law signals the beginning of the most challenging period of opportunity and peril ever faced by the American states. Simply put, we've got to perform. Talk about welfare and job training reform has to be converted to action. Promises to fix Medicaid will no longer be adequate. Assurances that we will care for the disabled, poor and elderly will have to be proven.

Do not underestimate the difficulty of this task. This is a substantial task and to accomplish it, states we will have to be bold, courageous and wise. Frankly, there are those who relish the thought of our failure. Those who depend on centralized control, who in the name of their own self-proclaimed superior compassion and caring, will be watching our every move. Nor should we suffer the illusion that everyone who voted for these measures can be counted on to support the return of power to the states in the future. Many who voted for these bills did so because the bills balance the budget, not out of a sense of ideological commitment to devolution.

In the years to come, states will be fighting a two-front battle. To our front will be the formidable challenge of managing unparalleled change. To our rear will be those who will immediately attempt to attach strings and controls to every aspect of our state programs. In an attempt to reclaim federal control, they will use every bobble and bounce in any of the states to declare all our efforts a premature failure. Long term, it will require every governor to be part of this team to protect our ability to act. Otherwise, this will not represent an era of revitalization for states, but will instead be quite the opposite. The risk reward quotient here is high for the institution of states.

Working together to jealously guard the role of states must become part of the role of the modern governor, or the "Mothers Rules" protections intended by the founders will be lost forever. The states will become the department of taxation for the Congress of the United States. During the years to come, our success will depend on keeping the partnership with Congress alive and healthy. It will also require that we work together as states. There will be both innovations and mistakes and we'll learn from each other. If James Madison, Thomas Jefferson and George Washington could have joined us that day in Williamsburg, I believe they would have told us to be bold, to recall the historic, constitutional role state leaders must play. I believe they would tell us to do our duty, to act while the opportunity exists.

As stewards of their creation, the Constitution of the United States, I believe they would tell us we have an obligation to restore the balance in our budget, and the balance between our national and state governments. We will create a new generation of growth, prosperity and personal freedom if we move government back to our people in their towns and neighborhoods. In conclusion, let me be so bold as to say that when the budget act is signed it begins the process of revitalizing the states as a force in shaping the American Republic.