A Stitch in Haste

Why is anybody surprised?

The Department of Homeland Security yesterday slashed anti-terrorism money for Washington and New York, part of an immediately controversial decision to reduce grant funds for major urban areas in the Northeast while providing more to mid-size cities from Jacksonville to Sacramento.
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Homeland Security's grant programs have drawn criticism from cities both large and small; many have felt slighted by what they maintained was a haphazard and unfair distribution plan. This year's round of grants was supposed to ensure that enough money goes to areas at highest risk of terrorist attack by employing risk scores, effectiveness tests and 17 "peer review" panels consisting of homeland security professionals from 47 states.

Even when you stay true to the (now totally dead and buried) principle of fiscal federalism — i.e., the (now totally dead and buried) view that federal taxes should pay for federal public goods while state & local taxes pay for state & local public goods, and never the twain shall meet — even then you cannot escape the Politics of Pull. Take military bases, for example. The military is a federal public good (ignoring Iraq for the moment), but you still have to decide where to build the bases. Would anyone dare suggest that the system for locating military bases is apolitical? Heck, even the politicians admitted that it was impossible to trust them with the decision-making when it can time to reap that alleged "peace dividend" and shut a handful of them down.

So nowadays it's not military bases but Homeland Security budgets. First of all, it's not entirely clear to me that such spending satisfies fiscal federalism: the Border Patrol is a federal public good, but are metal detectors at the Empire State Building? It seems to me that if New York City is going to reap the benefits of its unique status, then it is perfectly reasonable to expect it to bear the costs of protecting it from proximate threats. Stated differently, it's easy for the liberal triumvirate of Clinton, Schumer and Bloomberg to call New York a "national treasure" when it implies that the national fisc should therefore subsidize it.

But let's assume that the Empire State Building and other local landmarks are, somehow, federal public goods (or, if your prefer gobbledygook, "national treasures"). Precisely how do you decide whether the Brooklyn Bridge is "more important" than the Golden Gate Bridge, or that the Sears Tower is more worthy of federal tax dollars than the St. Louis Arch? There have been suggestions that Las Vegas is very high on the terrorists' agenda — anyone going to suggest that Utah Mormons pick up the tab to protect their lascivious neighbors at the Bellagio?

There is simply no objective way to "properly" allocate these monies. And even if there were, who truly believes that such a process could survive the Politics of Pull? Maybe there should be a Homeland Security subsidy budget — I think not. But even so, let's not lie to ourselves about the "right" way to spend such a budget. There is no right way — there is only the politicians' way.

More thoughts at Below the Beltway, Becker-Posner.