The word from Washington: ‘We have a lot of challenges’

Connecticut’s new man in Washington on Tuesday offered state agency leaders a glimpse at the job of trying to secure funding from a deficit-conscious Congress, in the midst of what he called a debate over the scope of the federal government.

Don’t expect new federal programs, Dan DeSimone, director of the governor’s Washington D.C. office, told agency commissioners during their monthly meeting with the governor. The federal money that does become available will likely be competitive, like the Race to the Top program.

DeSimone’s boss, Gov. Dannel P. Malloy, has made no secret of his aim to capture as much federal funding as possible. But this year, DeSimone warned, even preserving the state’s existing federal money will be a challenge.

“Connecticut obviously is a donor state,” DeSimone said, meaning that more tax dollars leave the state than come back. “We have a lot of challenges in changing that.”

Much of the work will be against the backdrop of a debate that DeSimone said hangs over Congress and is likely to shape the 2012 presidential race: defining the scope of the federal government.

“There are two basic choices,” he said: Cut spending significantly to reduce the role of the federal government, particularly its role providing a social safety net, or rebalance the federal government by cutting spending, raising revenues and preserving core safety net programs.

The latter, he said, is the framework President Barack Obama outlined. The former is the House budget resolution that calls for transforming Medicare and Medicaid to programs that are not entitlements, with more limited federal funding. In between, DeSimone said, is the “Gang of Six” Republican and Democrat senators working to reduce the deficit.

“The outcome of this debate has profound consequences for states, and the citizens of the state,” he said.

The best way state agencies can help preserve federal funding, he said, is to catalog the federal money they receive. The key is to develop a narrative, he said, of what the programs support and what the trade-offs would be if they get cut, then let the Congressional delegation know.

DeSimone asked agency leaders to consider whether someone in their department looks at the Federal Register daily to find possible opportunities–and, if not, to have his office help. Consider how effective your grant-writing teams are, he advised. He urged commissioners to get support from the governor for grant applications, and said that multiple governors working together can effectively lobby for changes.

“Your best leverage is the governor’s office,” he said.

DeSimone spoke several times about the how the current Congress, with a Republican majority in the House and a Senate that effectively requires 60 votes to pass legislation, differs from its predecessor.

The previous Congress, DeSimone said, was a “target-rich environment” for proposing new ideas. The federal health reform law and the stimulus program included multiple ideas from states, he said.

“This Congress is a little different,” he said, noting that the House is not focused on new federal programs.

Or, as he put it later, “New federal programs aren’t going to happen.”

There is some flexibility in federal agencies, which can adjust programs if the case is made that doing so would be effective, he said.

And states can benefit by lobbying for policy changes through the reauthorization process for programs with broad bipartisan support, including transportation and education programs committees are now working on, DeSimone said.

Not available: Earmarks. They’re “off the table,” DeSimone said. He drew laughter by adding that, “If I had a bet, I’d say they’ll come back soon enough.”

Many Congressional activities are not following the regular order of bills moving from committee to subcommittee and back, to the floor, the other body, conference committee and, ultimately, the president, he said.

“A lot of this is just being negotiated at the top level by the leadership,” he said.

With a debate over the debt ceiling looming, DeSimone warned that the outcome could be potentially significant for the state. Republicans aren’t likely to agree to any revenue changes, he predicted.

The most extreme outcome of the debate, he said, would be a global spending cap that would force the federal government to reduce spending dramatically. The only way to do it would be to significantly change Medicare and Medicaid, and cut non-defense discretionary spending, a category that includes aid to states.

“We have to be ready,” DeSimone said. “We have to have all the data, all the facts, and we have to show the trade-offs.”