"Maintenance of Effort"

By Richard Vedder

I am in Washington, D.C., and as I saw Charlie Reed (head of the California State University system) in the House Dining Room and roaming the halls of the Capitol, I was reminded of why he was no doubt there --the Higher Education Act reauthorization. Calls from the Christian Science Monitor and the National Council of State Legislatures today further reminded me even more of one of the proposed provisions of the law: "maintenance of effort."

This provision is simply God-awful. It penalizes states that reduce university appropriations below levels in the recent past. It is an absolutely brazen interference by the federal government into the actions of state legislatures. It implies that a one-size-fits-all federal rule is desirable in every state. It may force some states to reduce other forms of more desirable spending because of the financial costs of maintaining higher ed --which may be a lower priority in some states.

Not only that, there is abundant evidence that the association between state appropriations on higher education and economic growth is not positive --and is likely somewhat negative. In other words, this inane provision would push states into following a growth-reducing fiscal policy. In short, it is just plain dumb.

There are some good congressmen and congresswomen. I ate breakfast with a dozen or so of them this morning. They asked good questions, made astute observations. Yet the whole is less than the sum of its parts --as an institution Congress on average makes bad decisions, in part subverted by the perverse effects of special interest lobbying and political funding.

Let us not pervert our federal system of government in order to implement hare-brained schemes of funding higher education.