To start with the obvious: the national debt has blasted past $37 trillion, interest costs are compounding faster than growth, and Congress is lurching from near-shutdown to here-shutdown just to keep the lights on. Those headlines aren’t noise; they’re a forecast. When Washington’s balance sheet buckles and governance runs on continuing-resolution autopilot, the most volatile line in a state budget becomes federal money.
States can’t fix D.C.’s math or its melodrama. But they can decide, right now, how to protect classrooms, keep hospitals open, and stay in the black when the federal tide turns. Our ongoing whitepaper series is the playbook.
The first paper, Tennessee's Fiscal Resilience, sets the stage. Tennessee depends on hundreds of federal streams and the share has crept up while contingency planning has lagged. Rainy-day cash buys time, not strategy. The better model is Utah-style: routine stress tests, ranked priority ladders, and pre-built contingency steps. Treat federal funds like a risky counterparty, not a permanent lifeline.
Next in the series, Reverse ESSER turns posture into process for K–12. ESSER taught us that simple, state-led templates can channel chaos into coherence: Academics, Student Readiness, Educators, Foundations, all with public plans and regular updates. The “Reverse-ESSER” adapts that same template for a world of less: ask districts in advance what they’ll shield at minus 10%, 25%, or 40% federal support. Cost it, debate it, and publish it. That swaps panic for preparation and gives leaders a credible script when the next wobble hits: “We prepared. We know what’s essential. We know how to protect it.”
Paper 3, soon to be released, tackles the hardest test, Medicaid, under a dated, real constraint. The One Big Beautiful Bill walks down the provider-tax safe harbor from 6% to 3.5%. Although the cuts are limited to Medicaid expansion states, we see them as a sign of things to come and a useful real-world target. Instead of chasing gimmicks, we model seven reforms that lower the price of functioning care: scale episodes of care (where Tennessee already leads), move toward site-neutral and reference pricing to kill setting games, pilot global budgets that swap volume for stewardship, tighten drug spend to clinical value, and keep rebalancing LTSS toward home and community. Sequenced conservatively to avoid double-counting, a Hybrid path plausibly covers ~half the gap by Year 5 (~$550M); an Aspirational path reaches ~two-thirds (~$700M). Not magic: just incentives aligned with math.
The through-line is stewardship over spectacle. Federal dysfunction, the shutdown brinkmanship, the omnibus cliffhangers, isn’t an excuse for state fatalism; it’s a design constraint. Smart states make their systems anti-fragile: stress tests that bite, triage templates that travel from abundance (ESSER) to scarcity (Reverse-ESSER), and payment rules that reward outcomes instead of paperwork. The goal is simple: when D.C. sneezes, Tennessee keeps breathing.
Call it the InTheBlackOS:
See the risk. Map federal exposure, rank essentials, and run real stress tests.
Pre-commit the response. Reverse-ESSER scenarios with costed options, published ahead of time.
Bend the cost curve. Episodes, site-neutrality, reference pricing, global budgets, drug controls, LTSS rebalancing.
We’re not promising painless. We’re promising prepared. In an era where interest costs crowd out discretion and shutdown theatrics crowd out prudence, the winners will be the states that think before they cut, protecting what matters without pretending the old money will always show up. That’s the point of the series. And the invitation.
Pt. 2 - Reverse ESSER: A Framework for Safeguarding Tennessee Education
Pt. 3 - Now We Have to Think: Tennessee Medicaid Reform in a New Fiscal Era (Coming soon)