Take the Social Security Administration, as slender and effective a bureaucracy as exists on earth. The organization makes monthly payments to 61 million beneficiaries, with a low error rate and overhead well below 1 percent of costs. Similarly, the Internal Revenue Service is a ruthlessly effective tax collector, when compared to those in other high-income countries and to the states. California spends 94 cents on overhead for every $100 of state tax revenue collected, for instance, with Great Britain spending 74 cents. The feds, on the other hand, spend less than 50 cents. Moreover, the federal bureaucracy functions with more oversight—powerful inspectors general, Congressional budget hawks and committee chairs, and the press sniffing around—than statehouses do, helping to reduce graft.

That said, it is not easy to compare the state and federal governments in terms of efficiency. For one, they tend to do different things, with federal dollars primarily spent on Social Security, health-insurance programs, and the military, and state dollars spent on education, health, transportation, prisons, and a variety of other priorities. “There are some types of things that state governments are good at handling, and other things the federal government is good at handling,” said Jason Sorens, the program director of the Political Economy Project at Dartmouth College. “There are some kinds of fiscal relationships between the federal and state governments that are more efficient than others, but that’s not the same thing as saying that states are more efficient than the federal government.”

Making them even harder to compare is the fact that states are often spending federal dollars and complying with federal regulations, blurring the line between state and national initiatives. “The federal government is like a giant ATM,” said Elaine Kamarck, the director of the Center for Effective Public Management at the Brookings Institution. “Scratch any state or local program and you’ll find federal money. This is why everyone’s decided government shutdowns are a real disaster. The two times it happens, everybody realizes it’s not just the national park that closes—it’s Catholic Charities and the drug treatment center down the road.”

Indeed, Medicaid—which Lindsey Graham of South Carolina and Bill Cassidy of Louisiana had hoped to turn into a block grant to the states—is one such federal-state partnership. The states already have latitude in spending federal dollars on the program; for example, Missouri chooses to fund “health homes” and Oregon puts money toward accountable care organizations.“These innovative models demonstrate that current Medicaid rules allow states significant flexibility,” argues Hannah Katch of the Center on Budget and Policy Priorities, a Washington-based think tank. What is more, the system has delivered high-quality care at a relatively low cost, both in administrative terms and in terms of spending per person. “States have actually been quite good at delivering health coverage efficiently through Medicaid,” said Larry Levitt of the Kaiser Family Foundation, a health research group.