"Puzzle Palace on the Potomac" is a phrase, possibly originated by Reagan, to describe Washington DC (and possibly its bureaucracy). Sometimes it is pluralized
(puzzle palaces) which may be used to distinguish the fact that there are multiple agencies, departments, etc. to the government.
There is also a book by the title
Assignment: Pentagon: A Guide to the Potomac Puzzle Palace which appears to discuss the bureaucratic organization of the Department of Defense.
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Reagan refers to the "Puzzle Palace on the Potomac" in '
Encroaching Control':
Today, 31 cents out of every dollar earned in the United States goes to the tax collector. And of that 31 cents, 23 cents goes to the federal government, leaving 8 cents for the federal, county and the local community to divide up between itself. No wonder we have to turn to government and ask for federal aid in all of our projects. But wouldn't it make a lot more sense to keep some of that money here in the local community to begin with instead of than routing it through that puzzle palace on the Potomac where its returned to us, minus a sizable carrying charge?
The article, '
Losing Freedom by Installments' follows up with some interesting financial statistics:
Early in our history we were warned that the farther the spending was removed from the source of taxation, the less restraint there would be in its spending. Today, shocking figures prove the truth of this. When you contribute to your local charities, you must give $1.10 for every $1 that is to be spent in good works. County welfare sees an increase in this overhead to where $1.23 must be raised for every $1 actually spent on welfare. At the state level it takes $1.49 and the federal government must raise $2.10 for every dollar it will spend on the recipients of federal welfare a $1.10 overhead for each $1.
There is also a quick reference to puzzle palace
s in '
The Great Myth of the Great Society':
But that same government has figures that reveal that we at the local level in the last decade have increased school revenue by a hundred and fifty six percent. We have built in ten years thirty billion dollars worth of classrooms. We have reduced the ratio of pupil to teacher and pupil to classroom and we have increased the average teacher's salary by sixty five percent. And yet every suggestion that we make for earmarking tax money and allowing it to remain at the local level without running it through those puzzle palaces on the Potomac first, is met with great resistance. Already there are a hundred and thirty five separate federal agencies and officers doling out money at the college level.
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Plain Talk in the Puzzle Palace (Time Magazine, Jun 24, 1966)
Assignment: Pentagon: A Guide to the Potomac Puzzle Palace