"Both Democrats and Republicans could also coalesce around another concept: fiscal subsidiarity. This doctrine holds that problems should be solved at the lowest government level feasible; it means that more federal revenue would be transferred to states, cities and towns, leaving less for programs directed from Washington. Democrats have traditionally looked to federal programs as key for social relief and public investments. Yet more than ever, sustainable reforms need local design and backing. Suppose that we finally agree to collect more revenue in order to boost spending on health care, education and clean energy. The increased taxes would be collected by the Federal Government and then transferred to state governments, which would design and implement the public programs together with local governments."
This is or should be an anathema to any self-respecting Republican. It certainly is to any Libertarian or Tea Party member. Now I am well aware this is common practice today, but to suggest even more? What can possibly be gained by have the Federal Government to collect money that it doles back out to the states?
If certain relief programs and public investment are best provided for at the state level, the essence of Federalism, why should the Federal Government be involved in the first place? How about applying the 10th amendment and have the Federal Government stop doing these things, stop collecting money to do these things, and simply let the states handle them. An additional benefit of this is the elimination of states’ tendencies to implement "buy two, get one free" programs (so prevalent with the stimulus plan) that if they had to pay full price the voters would just as soon skip.
In this way we significantly scale the Federal Government and provide the possibility of taming the deficit. And we push safety social program spending to the states where the people can more directly influence the scope and scale of such programs. If folk want to live in a high tax, high spend state such as California or a low tax, low spend state such as Texas, they can.
But to further empower the US Congress as a middleman? No way.