In the United States, rights and powers are reserved to the states by the Tenth Amendment. Since the financial crisis of September 15, 2008, however, it may appear that the federal government, sometimes called the national or central government, predominates. That might be a temporarily exaggerated perception, for there are 89,529 separate governmental units in this nation.
Visitors from countries such as France and Spain are often awestruck by the complexity of our system of government. Consider that a criminal action can be defined by state law, by national law, or by both. Thus, a criminal suspect can be prosecuted in the state court system or in the federal court system (or both). Often, economic regulation covering exactly the same issues exists at the local level, the state level, and the national level - generating multiple forms to be completed, multiple procedures to be followed, and multiple laws to be obeyed. Many programs are funded by the national government but administered by state and local governments.
Relations between central governments and local units can be structured in various ways. Federalism is one of these ways. Understanding federalism and how it differs from other forms of government is important in understanding the American political system. Indeed, many political issues today would not arise is we did not have a federal form of government in which governmental authority is divided between the central government and various subunits. States, for example, might not have the right to set their own marriage laws.
THREE SYSTEMS OF GOVERNMENT
There are almost two hundred independent nations in the world today. Each of these nations has its own system of government. Generally, though, we can describe how nations structure relations between central governments and local units in terms of three models: (1) the unitary system, (2) the confederal system, and (3) the federal system. The most popular, both historically and today, is the unitary system.
A Unitary System
A unitary system of government is the easiest to define. Unitary systems place ultimate governmental authority in the hands of the national, or central, government. Consider a typical unitary system - France. There are regions, departments, municipalities, and communes in France. The regions, departments, cities, and communes have elected and appointed officials. So far, the French system appears to be very similar to the U.S. system, but the similarity is only superficial. Under the unitary French system, the decisions of the lower levels of government can be overruled by the national government. The national government also can cut off the funding for local government activities. Moreover, in a unitary system such as that in France, all questions of education, police, the use of land, and welfare are handled by the national government.
Britain, Egypt, Ghana, Israel, Japan, the Philippines, and Sweden - in fact, a majority of all nations - have unitary systems of government.
A Confederal System
A confederation is the opposite of a unitary governing system. It is a league of independent states, in which a central government or administration handles only those matters of common concern expressly delegated to it by the member states. The central government has no ability to make laws directly applicable to member states unless the members explicitly support such laws. The United States under the Articles of Confederation was a confederal system.
Few, if any confederations of this kind exist. One possible exception is the European Union (EU), a league of countries that has developed a large body of Europe-wide laws that all members must observe. Many members even share a common currency, the euro. Recent problems in the "Eurozone," demonstrate the limits of a confederal system.
A Federal System
The federal system lies between the unitary and confederal forms of government. In a federal system, authority is divided, usually by a written constitution, between a central government and a regional, or subdivisional, governments (often called constituent governments). The central government and the constituent governments both act directly on the people through laws and through the actions of elected and appointed governmental officials. Within each government's sphere of authority, each is supreme, in theory. Thus, a federal system differs sharply from a unitary one, in which the central government is supreme and the constituent governments derive their authority from it. In addition to the United States, Australia, Brazil, Canada, Germany, India, and Mexico are examples of nations with federal systems.
LIST --> Government Units in the United States
Federal government - 1
State governments and District of Columbia - 51
Local governments
Counties - 3,034
Municipalities - 19,492 (mainly cities or towns)
Townships - 16,519 (less extensive powers)
Special districts - 37,381 (water, sewer, and the like)
School districts - 13,051
TOTAL = 89,529
WHY FEDERALISM?
Why did the United States develop in a federal direction? We look here at that question, as well as some of the arguments for and against a federal form of government.
A Practical Solution
The historical basis of our federal system was laid down in Philadelphia at the Constitutional Convention, where advocates of a strong national government opposed states' rights advocates. This conflict continued through to the ratifying conventions in the several states. The resulting federal system was a compromise. The supporters of the new Constitution were political pragmatists - they realized that without a federal arrangement, the new Constitution would not be ratified. The appeal of federalism was that it retained state traditions and local power while establishing a strong national government capable of handling common problems.
Even if the founders had agreed on the desirability of a unitary system, size and regional isolation would have made such a system difficult operationally. At the time of the Constitutional Convention, the thirteen states taken together were much larger geographically than England or France. Slow travel and communication, combined with geographic spread, contributed to the isolation of many regions within the states. It could take several weeks for all of the states to be informed about a particular political decision.
Other Arguments for Federalism
For big countries, such as Canada, India, and the United States, federalism allows many functions to be "farmed out" by the central government to the states or provinces. The lower levels of government that accept these responsibilities thereby can become the focus of political dissatisfaction rather than the national authorities. Also, even with modern transportation and communications systems, the large area or population of some nations makes it impractical to locate all political authority in one place.
Finally, federalism brings government closer to the people. It allows more direct access to, and influence on, government agencies and policies, rather than leaving the population restive and dissatisfied with a remote, faceless, all-powerful central authority.
Benefits for the United States. In the United States, federalism historically has yielded many benefits. State governments long have been a training ground for future national leaders. Many presidents made their political mark as state governors. The states themselves have been testing grounds for new government initiatives. As United States Supreme Court justice Louis Brandeis once observed:
"It is one of the happiest incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory and try novel social and economic experiments without risk to the rest of the country."
Examples of programs pioneered at the state level include unemployment compensation, which began in Wisconsin, and air-pollution control, which was initiated in California. Today, states are experimenting with policies ranging from education reform to homeland security strategies. Since the passage of the 1996 welfare reform legislation - which gave more control over welfare programs to state governments - states also have been experimenting with different methods of delivering welfare assistance.
Allowance for Many Political Subcultures. The American way of life always has been characterized by a number of political subcultures, which divide along the lines of race and ethnic origin, region, wealth, education, and, more recently, degree of religious commitment and sexual preference. The existence of diverse political subcultures would appear to be incompatible with a political authority concentrated solely in a central government. Had the United States developed into a unitary system, various political subcultures certainly would have been less able to influence government behavior than they have been, and continue to be, in our federal system.
Arguments Against Federalism
Not everyone thinks federalism is such a good idea. Some see it as a way for powerful state and local interests to block progress and impede national plans. Similar political units are more likely to be dominated by a single practical group. (This was essentially the argument that James Madison put forth in Federalist Paper No. 10.) In fact, the dominant groups in some cities and states have resisted implementing equal rights for minority groups. Some argue, however, that the dominant factions in other states have been more progressive than the national government in many areas, such as environmental protection.
Critics of federalism also argue that too many Americans suffer as a result of the inequalities across the states. Individual states differ markedly in educational spending and achievement, crime and crime prevention, and even the safety of their buildings. Not surprisingly, these critics argue for increased federal legislation and oversight. This might involve creating national standards for education and building codes, national expenditure minimums for crime control, and similar measures.
Others see dangers in the expansion of national powers at the expense of the states. President Ronald Reagan (1981-1989) said, "The Founding Fathers saw the federalist system as constructed something like a masonry wall. The States are the bricks, the national government is the mortar... Unfortunately, over the years, many people have increasingly come to believe that Washington is the whole wall."
THE CONSTITUTIONAL BASIS FOR AMERICAN FEDERALISM
The term federal system cannot be found in the U.S. Constitution. Nor is it possible to find a systematic division of governmental authority between the national and state governments in that document. Rather, the Constitution sets out different types of powers. These powers can be classified as (1) the powers of the national government, (2) the powers of the states, and (3) prohibited powers. The Constitution also makes it clear that if a state or local law conflicts with a national law, the national law will prevail.
Powers of the National Government
The powers delegated to the national government include both expressed and implied powers, as well as the special category of inherent powers. Most of the powers expressly delegated to the national government are found in the first seventeen clauses of Article I, Section 8, of the Constitution. These enumerated powers, also called expressed powers, include coining money, setting standards for weights and measures, making uniform naturalization laws, admitting new states, establishing post offices and post roads, and declaring war. Another important enumerated power is the power to regulate commerce among the states - a topic we deal with later in this chapter.
The Necessary and Proper Clause. The implied powers of the national government are also based on Article I, Section 8, which states that the Congress shall have the power
to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.
This clause is sometimes called the elastic clause, or the necessary and proper clause, because it provides flexibility to our constitutional system. It gives Congress the power to do whatever is necessary to execute its specifically delegated powers. The clause was first used in the Supreme Court decision of McCulloch v. Maryland to develop the concept of implied powers. Through this concept, the national government has succeeded in strengthening the scope of its authority to meet the many problems that the framers of the Constitution did not, and could not, anticipate.
Inherent Powers. A special category of national powers that is not implied by the necessary and proper clause consists of what have been labeled the inherent powers of the national government. These powers derive from the fact that the United States is a sovereign power among nations, and so its national government must be the only government that deals with other nations. Under international law, it is assumed that all nation-states, regardless of their size or power, have an inherent right to ensure their own survival. To do this, each nation must have the ability to act in its own interest among and with the community of nations - by, for instance, making treaties, waging war, seeking trade, and acquiring territory.
Note that no specific clause in the Constitution says anything about the acquisition of additional land. Nonetheless, the federal government's inherent powers allowed it to make the Louisiana Purchase in 1803 and then go on to acquire Florida, Texas, Oregon, Alaska, Hawaii, and other lands. The United States grew from a mere thirteen states to fifty states, plus several territories.
The national government has these inherent powers whether or not they have been enumerated in the Constitution. Some constitutional scholars categorize inherent powers as a third type of power, completely distinct from the delegated powers (both expressed and implied) of the national government.
Powers of the State Governments
The Tenth Amendment states that the powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states, or to the people. These are the reserved powers that the national government cannot deny to the states. Because these powers are not expressly listed, there is sometimes a question as to whether a certain power is delegated to the national government or reserved to the states.
State powers have been held to include each state's right to regulate commerce within its borders and to provide for a state militia. States also have the reserved power to make laws on all matters not prohibited to the states by the U.S. Constitution or state constitutions and not expressly, or by implication, delegated to the national government. Furthermore, the states have police power - the authority to legislate for the protection of the health, morals, safety, and welfare of the people. Their police power enables states to pass laws governing such activities as crime, marriage, contracts, education, intrastate transportation, and land use.
The ambiguity of the Tenth Amendment has allowed the reserved powers of the states to be defined differently at different times in our history. When there is widespread support for increased regulation by the national government, the Tenth Amendment tends to recede into the background. When the tide turns the other way (in favor of states' rights), the Tenth Amendment is resurrected to justify arguments supporting the states.
Prohibited Powers
The Constitution prohibits, or denies, a number of powers to the national government. For example, the national government has expressly been denied the power to impose taxes on goods sold to other countries (exports). Moreover, any power not granted expressly or implicitly to the federal government by the Constitution is prohibited to it. For example, many legal experts believe that the national government could not create a national divorce law system without a constitutional amendment. The states are also denied certain powers. For example, no state is allowed to enter into a treaty on its own with another country.
Concurrent Powers
In certain areas, the states share concurrent powers with the national government. Most concurrent powers are not specifically listed in the Constitution - they are only implied. An example of a concurrent power is the power to tax. The types of taxation are divided between the levels of government. For example, states may not levy a tariff (a set of taxes on imported goods). Only the national government may do this. Neither government may tax the facilities of the other. If the state governments did not have the power to tax, they would not be able to function other than on a ceremonial basis.
Additional concurrent powers include the power to borrow funds, to establish courts, and to charter banks and corporations. To a limited extent, the national government exercises police power, and to the extent that it does, police power is also a concurrent power. Concurrent powers exercised by the states are normally limited to the geographic area of each state and to those functions not granted by the Constitution exclusively to the national government.
The Supremacy Clause
The supremacy of the national constitution over subnational laws and actions is established in the supremacy clause of the Constitution. The supremacy clause (Article VI, Clause 2) states the following:
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made... under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.
In other words, states cannot use their reserved or concurrent powers to thwart national policies. All national and state officers, including judges, must be bound by oath to support the Constitution. Hence, any legitimate exercise of national governmental power supersedes any conflicting state action. Of course, deciding whether a conflict actually exists is a judicial matter.
The National Guard can serve as an example of how federal power supersedes that of the states. Normally, the National Guard functions as a state militia under the command of the governor. It is frequently called out to assist with recovery efforts after natural disasters such as hurricanes, floods, and earthquakes. The president, however, can assume command of any National Guard unit at any time. Presidents Bush and Obama repeatedly "federalized" such units for deployment in Afghanistan and Iraq. In the conflicts in these countries, National Guard members and reservists made up a larger percentage of the forces on combat duty than during any previous war in U.S. history.
National government legislation in a concurrent area is said to preempt (take precedence over) conflicting state or local laws or regulations in that area. One of the ways in which the national government has extended its powers, particularly during the twentieth century, is through the preemption of state and local laws by national legislation. In the first decade of the twentieth century, fewer than twenty national laws preempted laws and regulations issued by state and local governments. By the beginning of the twenty-first century, the number had grown into the hundreds.
Vertical Checks and Balances
One of the concerns of the founders was to prevent the national government from becoming too powerful. For that reason, they divided the government into three branches - legislative, executive, and judicial. They also created a system of checks and balances that allowed each branch to check the actions of the others. The federal form of government created by the founders also involves checks and balances. These are sometimes called vertical checks and balances because they involve relationships between the states and the national government. They can be contrasted with horizontal checks and balances, in which the branches of government that are on the same level - either state or national - can check one another.
For example, the reserved powers of the states act as a check on the national government. The founders also made it impossible for the central government to change the Constitution without the states' consent. Finally, many national programs and policies are administered by the states, which gives the states considerable control over the ultimate shape of those programs and policies.
The national government, in turn, can check state policies by exercising its constitutional powers under the clauses just discussed, as well as under the commerce clause. Furthermore, the national government can influence state policies indirectly through federal grants.
Interstate Relations
So far, we have examined only the relationship between central and state governmental units. The states, however, have constant commercial, social, and other dealings among themselves. The national Constitution imposes certain "rules of the road" on interstate relations. These rules have had the effect of preventing any one state from setting itself apart from the other states. The three most important clauses governing interstate relations in the Constitution, all taken from the Articles of Confederation, require each state to do the following:
1. Give full faith and credit to every other state's public acts, records, and judicial proceedings (Article IV, Section 1).
2. Extend to every other state's citizens the privileges and immunities of its own citizens (Article IV, Section 2).
3. Agree to return persons who are fleeing from justice in another state back to their home state when requested to do so (Article IV, Section 2).
Following these constitutional mandates is not always easy for the states. For example, one question that has arisen in recent years is whether states will be constitutionally obligated to recognize same-sex marriages performed in other states.
Additionally, states may enter into agreements with one another called interstate compacts - if consented to by Congress. In reality, congressional consent is necessary only if such a compact increases the power of the contracting states relative to other states (or to the national government). An example of an interstate compact is the Port Authority of New York and New Jersey, established by an agreement between those two states in 1921.
THE SUPREME COURT DEFINES THE POWERS OF THE NATIONAL GOVERNMENT
Although political bodies at all levels of government play important roles in the process of settling disputes over the nature of our federal system, ultimately it is the United States Supreme Court that casts the final vote. As might be expected, the character of the referee will have an impact on the ultimate outcome of any dispute. From 1801 to 1835, the Supreme Court was headed by Chief Justice John Marshall, a Federalist who advocated a strong central government. We look here at two cases decided by the Marshall Court: McCulloch v. Maryland and Gibbons v. Ogden. Both cases are considered milestones in the movement toward national government supremacy.
McCulloch v. Maryland (1819)
The U.S. Constitution says nothing about establishing a national bank. Nonetheless, at different times Congress chartered two banks - the First and Second Banks of the United States - and provided part of their initial capital. Thus, they were national banks. The government of Maryland imposed a tax on the Second Bank's Baltimore branch in an attempt to put that branch out of business. The branch's cashier, James William McCulloch, refused to pay the Maryland tax. When Maryland took McCulloch to its state court, the state of Maryland won. The national government appealed the case to the Supreme Court.
One of the issues before the Court was whether the national government had the implied power, under the necessary and proper clause, to charter a bank and contribute capital to it. The other important question before the Court was the following: If the bank was constitutional, could a state tax it? In other words, was a state action that conflicted with a national government action invalid under the supremacy clause?
Chief Justice Marshall held that if establishing a national bank aided the national government in the exercise of its designated powers, then the authority to set up such a bank could be implied. Having established this doctrine of implied powers, Marshall then answered the other question before the Court and established the doctrine of national supremacy. Marshall ruled that no state could use its taxing power to tax a part of the national government. If it could, "the declaration that the Constitution... shall be the supreme law of the land, is [an] empty and unmeaning [statement]."
Marshall's decision enabled the national government to grow and to meet problems that the Constitution's framers were unable to foresee. Today, practically every expressed power of the national government has been expanded in one way or another by use of the necessary and proper clause.
Gibbons v. Ogden (1824)
One of the most important parts of the Constitution included in Article I, Section 8, is the commerce clause, in which Congress is given the power "to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." The meaning of this clause was at issue in Gibbons v. Ogden.
The Background of the Case. Robert Fulton and Robert Livingston secured a monopoly on steam navigation on the waters in New York State from the New York legislature in 1803. They licensed Aaron Ogden to operate steam-powered ferryboats between New York and New Jersey. Thomas Gibbons, who had obtained a license from the U.S. government to operate boats in interstate waters, decided to compete with Ogden, but he did so without New York's permission. Ogden sued Gibbons. New York's state courts prohibited Gibbons from operating in New York waters. Gibbons appealed to the Supreme Court.
There were actually several issues before the Court in this case. The first issue was how the term commerce should be defined. New York's highest court had defined the term narrowly to mean only the shipment of goods or the interchange of commodities, not navigation or the transport of people. The second issue was whether the national government's power to regulate interstate commerce extended to commerce within a state (intrastate commerce) or was limited strictly to commerce among the states (interstate commerce). The third issue was whether the power to regulate interstate commerce was a concurrent power (as the New York court had concluded) or an exclusive national power.
Marshall's Ruling. Marshall defined commerce as all commercial interactions - all business dealings - including navigation and the transport of people. Marshall also held that the commerce power of the national government could be exercised in state jurisdictions, even though it could not reach solely intrastate commerce. Finally, Marshall emphasized that the power to regulate interstate commerce was an exclusive national power. Marshall held that because Gibbons was duly authorized by the national government to navigate in interstate waters, he could not be prohibited from doing so by a state court.
Marshall's expansive interpretation of the commerce clause in Gibbons v. Ogden allowed the national government to exercise increasing authority over economic affairs throughout the land. Congress did not immediately exploit this broad grant of power. In the 1930s and subsequent decades, however, the commerce clause became the primary constitutional basis for national government regulation.
FROM THE CIVIL WAR TO THE NEW DEAL
The controversy over slavery that led to the Civil War took the form of a dispute over national government supremacy versus the rights of the separate states. Essentially, the Civil War brought to an ultimate and violent climax the ideological debate that had been outlined by the Federalist and Anti-Federalist parties even before the Constitution was ratified.
The Shift Back to States' Rights
As we have seen, while John Marshall was chief justice of the Supreme Court, he did much to increase the power of the national government and to reduce that of the states. During the administration of President Andrew Jackson (1829-1837), however, a shift back to states' rights began. The question of the regulation of commerce became one of the major issues in federal-state relations. When Congress passed a tariff in 1828, the state of South Carolina unsuccessfully attempted to nullify the tariff (render it void), claiming that in cases of conflict between a state and the national government, the state should have the ultimate authority over its citizens.
During the next three decades, the North and South became even more sharply divided, especially over the slavery issue. On December 20, 1860, South Carolina formally repealed its ratification of the Constitution and withdrew from the Union. On February 4, 1861, representatives from six southern states met at Montgomery, Alabama, to form a new government called the Confederate States of America.
War and the Growth of the National Government
The ultimate defeat of the South in 1865 permanently ended the idea that a state could successfully claim the right to secede, or withdraw, from the Union. Ironically, the Civil War - brought about in large part because of the South's desire for increased states' rights - resulted in the opposite: an increase in the political power of the national government.
The War Effort. Thousands of new employees were hired to run the Union war effort and to deal with the social and economic problems that had to be handled in the aftermath of the war. A billion-dollar ($1.3 billion, which is about $18 billion in today's dollars) national government budget was passed for the first time in 1865 to cover the increased government expenditures. The first (temporary) income tax was imposed on citizens to help pay for the war.
The Civil War Amendments. The expansion of the national government's authority during the Civil War was also reflected in the passage of the Civil War amendments to the Constitution. Before the war, it was a bedrock constitutional principle that the national government should not interfere with slavery in the states. The Thirteenth Amendment, ratified in 1865, did more than interfere with slavery - it abolished the institution altogether.
The Fourteenth Amendment, ratified in 1868, defined who was a citizen of each state. It sought to guarantee equal rights under state law, stating that
[no] State [shall] deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.
In time, the courts interpreted these words to mean that the National Bill of Rights applied to state governments. Finally, the Fifteenth Amendment (1870) gave African Americans the right to vote in all elections, including state elections - although a century would pass before that right was enforced in all states.
Although the outcome of the Civil War firmly established the supremacy of the national government and put to rest the idea that a state could secede from the Union, the war by no means ended the debate over the division of powers between the national government and the states.
Dual Federalism and the Retreat of National Authority
During the decades following the Civil War, the prevailing model of federalism was what political scientists have called dual federalism - a doctrine that emphasizes a distinction between national and state spheres of government authority. This doctrine looks on nation and state as co-equal sovereign powers. Neither the state government nor the national government should interfere in the other's sphere.
Various images have been used to describe different configurations of federalism over time. Dual federalism is commonly depicted as a layer cake, because the state governments and the national government are viewed as separate entities, like separate layers of a cake. The two layers are physically separate; they do not mix. For the most part, advocates of dual federalism believed that the state and national governments should not exercise authority in the same areas.
The doctrine of dual federalism represented a revival of states' rights following the expansion of national authority during the Civil War. Dual federalism, after all, was a fairly accurate model of the prewar consensus on federal-state relations. For many people, it therefore represented a return to normal.
The Civil War crisis drastically reduced the influence of the United States Supreme Court. In the prewar Dred Scott decision, the Court had attempted to abolish the power of the national government to restrict slavery in the territories. In doing so, the Court placed itself on the losing side of the impending conflict. After the war, Congress took the unprecedented step of exempting the entire process of southern reconstruction from judicial review. The Court had little choice but to acquiesce.
In time, the Supreme Court reestablished itself as the legitimate constitutional umpire. Its decisions tended to support dual federalism, defend states' rights, and limit the powers of the national government. The Court generally limited the exercise of police power to the states. For example, in 1918, the Court ruled that a 1916 national law banning child labor was unconstitutional because it attempted to regulate a local problem. In effect, the Court placed severe limits on the ability of Congress to legislate under the commerce clause of the Constitution.
The New Deal and the End of Dual Federalism
The doctrine of dual federalism receded into the background in the 1930s as the nation attempted to deal with the Great Depression. Franklin D. Roosevelt was inaugurated as president on March 4, 1933. In the previous year, nearly 1,500 banks had failed (and 4,000 more would fail in 1933). Thirty-two thousand businesses had closed down, and almost one-fourth of the labor force was unemployed. The public expected the national government to do something about the disastrous state of the economy.
The "New Deal." President Herbert Hoover (1929-1933), however, clung to the doctrine of dual federalism and insisted that unemployment and poverty were local issues. The state, not the national government, had the sole responsibility for combating the effects of unemployment and providing relief to the poor. Roosevelt did not feel bound by this doctrine, and his new Democratic administration energetically intervened in the economy. Roosevelt's "New Deal" included large-scale emergency antipoverty programs. In addition, the New Deal introduced major new laws regulating economic activity, such as the National Industrial Recovery Act of 1933, which established the National Recovery Administration (NRA).
The End of Dual Federalism. Roosevelt's expansion of national authority was challenged by the Supreme Court, which continued to adhere to the doctrine of dual federalism. In 1935, the Court ruled that the NRA program was unconstitutional. The NRA had turned out to be largely unworkable and was unpopular. The Court, however, rejected the program on the ground that it regulated intrastate, not interstate, commerce. This position appeared to rule out any alternative recovery plans that might be better designed.
In 1937, Roosevelt proposed legislation that would allow him to add up to six new justices to the Supreme Court. Presumably, the new justices would be more friendly to the exercise of national power than the existing members were. Congressional Democrats refused to support the measure, and it failed. Still, changes to the membership of the Court from 1937 on proved as effective as the failed "court-packing scheme." After 1937 the Court ceased its attempts to limit the national government's powers under the commerce clause.
COOPERATIVE FEDERALISM AND ITS IMPACT ON THE STATES
Some political scientists have described the era since 1937 as characterized by cooperative federalism, in which the states and the national government cooperate in solving complex problems. Roosevelt's New Deal programs, for example, often involved joint action between the national government and the states. The pattern of federal-state relationships during these years gave rise to a new metaphor for federalism - that of a marble cake. Unlike a layer cake, in a marble cake the two types of cake are intermingled, and any bite contains cake of both flavors.
As an example of how national and state governments work together under the cooperative federalism model, consider Aid to Families with Dependent Children (AFDC), a welfare program that was established during the New Deal. (In 1996, AFDC was replaced by Temporary Assistance to Needy Families - TANF.) Under the AFDC program, the national government provided most of the funding, but state governments established benefit levels and eligibility requirements for recipients. Local welfare offices were staffed by state, not national, employees. In return for national funding, the states had to conform to a series of regulations on how the program was to be carried out. These regulations tended to become more elaborate over time.
Federal Grants to the States
Even before the Constitution was adopted, the national government gave grants to the states in the form of land to finance education. The national government also provided land grants for canals, railroads, and roads. In the twentieth century, federal grants increased significantly, especially during Roosevelt's administration throughout the Great Depression and again in the 1960s, when the dollar amount of grants quadrupled. These funds were used for improvements in education, pollution control, recreation, and highways. With this increase in grants, however, came a bewildering number of restrictions and regulations.
Categorical Grants. In the 1980s, categorical grants were spread out across four hundred separate programs, but the five largest accounted for more than 50 percent of the revenues spent. These five programs were Medicaid (health care for the poor), highway construction, unemployment benefits, housing assistance, and welfare programs to assist mothers with dependent children and people with disabilities. For fiscal year 2013, the national government gave about $580 billion to the states. The shift toward a greater role for the central government in the United States can be seen in the increase in central government spending as a percentage of total government spending.
Before the 1960s, most categorical grants by the national government were formula grants. These grants take their name from the method used to allocate funds. They fund state programs using a formula based on such variables as the state's needs, population, or willingness to come up with matching funds. Beginning in the 1960s, the national government began increasingly to offer program grants. This funding requires states to apply for grants for specific programs. The applications are evaluated by the national government, and the applications may compete with one another. Program grants give the national government a much greater degree of control over state activities than do formula grants.
Over the decades, federal grants to the states have increased significantly. One reason for this increase is that Congress has decided to offload some programs to the states and provide a major part of the funding for them. Also, Congress continues to use grants to persuade states and cities to operate programs devised by the federal government. Finally, states often are happy to apply for grants because they are relatively "free," requiring only that the state match a small portion of each grant. States can still face criticism for accepting the grants, because their matching funds may be diverted from other state projects.
Block Grants. Block grants lessen the restrictions on federal grants given to state and local governments by grouping a number of categorical grants under one broad heading. Governors and mayors generally prefer block grants because such grants give the states more flexibility in how the funds are spent.
One major set of block grants provides aid to state welfare programs. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ended the AFDC program. The TANF program that replaced AFDC provided a welfare block grant to each state. Each grant has an annual cap. According to some, this is one of the most successful block grant programs. Although state governments prefer block grants, Congress generally favors categorical grants because the expenditures can be targeted according to congressional priorities.
Fiscal Federalism and State Budgets
In discussions of government policy, you may have heard the word fiscal. This word simply means "having to do with government revenues and expenditures." Fiscal policy, therefore, is policy concerning taxing or borrowing - and then spending the revenues. When the federal government makes grants to state and local governments, funds raised through taxation or borrowing by one level of government (the national government) are spent by another level (state and local governments). We can speak of this process as fiscal federalism. With more than 20 percent of state and local revenues supplied by the federal government, fiscal federalism clearly has a major impact on the finances of the states.
The Great Recession in the first decade of the 2000s had a devastating impact on state budgets, and in response the federal government substantially increased the amount of funding available to the states in 2009 and 2010. Much of this support came through President Barack Obama's stimulus plan, passed by Congress in February 2009. The new federal funds, however, did not fully compensate the states for the lost revenue and increased expenses resulting from the recession.
Feeling the Pressure - The Strings Attached to Federal Grants. No dollars sent to the states are completely free of "strings." All funds come with requirements that must be met by the states. Often, through the use of grants, the national government has been able to exercise substantial control over matters that traditionally have been under the purview of state governments. When the federal government gives federal funds for highway improvements, for example, it may condition the funds on the state's cooperation with a federal policy. This is exactly what the federal government did in the 1980s and 1990s to force the states to raise their minimum alcoholic beverage drinking age to twenty-one.
Such carrot-and-stick tactics have been used as a form of coercion in recent years as well. In 2002, for example, President George W. Bush signed the No Child Left Behind (NCLB) Act into law. Under the NCLB, Bush promised billions of dollars to the states to bolster their education budgets. The funds would only be delivered, however, if states agreed to hold schools accountable on standardized tests. Education traditionally had been under state control, and the conditions for receiving NCLB funds effectively stripped the states of some autonomy in creating standards for public schools.
Federal Mandates. For years, the federal government has passed legislation requiring that states improve environmental conditions or the civil rights of various groups. Since the 1970s, the national government has enacted hundreds of federal mandates requiring the states to take some action in areas ranging from voter registration, to ocean-dumping restrictions, to the education of people with disabilities. The Unfunded Mandates Reform Act of 1995 requires the Congressional Budget Office to identify mandates that cost state and local governments more than $50 million to implement. Nonetheless, the federal government routinely continues to pass mandates for state and local governments that cost more than that to put into place. For example, the National Conference of State Legislatures has identified federal mandates to the states in transportation, health care, education, environment, homeland security, election laws, and other areas with a total cost of $29 billion per year. Water-quality mandates appear to be particularly expensive.
One way in which the national government has moderated the burden of federal mandates is by granting waivers, which allow individual states to try out innovative approaches to carrying out the mandates. For example, Oregon received a waiver to experiment with a new method of rationing health-care services under the federally mandated Medicaid program.
Competitive Federalism. When state governments have authority in a particular field, there may be great variations from state to state in how they exercise that authority. Such differentials can lead to a competition among states, which has been called competitive federalism. For example, it is widely believed that major corporations are more likely to establish new operations in states with a "favorable business climate." Such a climate could result from state spending on roads and other infrastructure, a well-educated workforce, and other amenities. More often, a favorable business climate means low taxes on businesses and on the executives who run those businesses.
Always and everywhere, citizens tend to favor ample government services, even as they resist the taxes necessary to fund those services. Fiscal problems can be more severe than usual in bad economic times. State governments can experience fiscal difficulties even in times of economic growth, however, and competitive federalism adds to the pressures. To bridge the gap between demanded services and available revenues, some states have failed to put aside enough revenue to fund state employee pensions adequately.
THE POLITICS OF FEDERALISM
As we have observed, the allocation of powers between the national and state governments continues to be a major issue. We look here at some further aspects of the ongoing conflict between national authority and states' rights in our federal system.
What Has National Authority Accomplished?
Why is it that conservatives have favored the states and liberals have favored the national government? One answer is that throughout American history, the expansion of national authority typically has been an engine of social change. Far more than the states, the national government has been willing to alter the status quo. The expansion of national authority during the Civil War freed the slaves - a major social revolution. During the New Deal, the expansion of national authority meant unprecedented levels of government intervention in the economy. In both the Civil War and the New Deal eras, support for states' rights was a method of opposing these changes and supporting the status quo.
Another example of the use of national power to change society occurred during the presidency of Lyndon B. Johnson (1963-1969). Johnson oversaw the greatest expansion of national authority since the New Deal. Under Johnson, a series of civil rights acts forced the states to grant African Americans equal treatment under the law. Crucially, these acts included the abolition of all measures designed to prevent African Americans from voting. Johnson's Great Society and War on Poverty programs resulted in major increases in spending by the national government. As before, states' rights were invoked to support the status quo - states' rights meant no action on civil rights and no increase in antipoverty spending.
The "New Federalism"
In the years after 1968, the devolution of power from the national government to the states became a major ideological theme for the Republican Party. Republican president Richard Nixon (1969-1974) advocated what he called a "New Federalism" that would devolve authority from the national government to the states. In part, the New Federalism involved the conversion of categorical grants into block grants, thereby giving state governments greater flexibility in spending. A second part of Nixon's New Federalism was revenue sharing. Under the revenue-sharing plan, the national government provided direct, unconditional financial support to state and local governments.
Nixon was able to obtain only a limited number of block grants from Congress. The block grants he did obtain, plus revenue sharing, substantially increased financial support to state governments. Republican president Ronald Reagan (1981-1989) was also a strong advocate of federalism, but some of his policies withdrew certain financial support from the states. Reagan was more successful than Nixon in obtaining block grants, but Reagan's block grants, unlike Nixon's, were less generous to the states than the categorical grants they replaced. Under Reagan, revenue sharing was eliminated.
Federalism Today
In recent years, it has not been clear whether competing theories of federalism divide the Republicans from the Democrats at all, at least in practice. Consider that the passage of welfare reform legislation in 1996, which involved transferring significant control over welfare programs to the states, took place under Democratic president Bill Clinton (1993-2001). In contrast, under Republican president George W. Bush, Congress enacted the No Child Left Behind Act of 2001, which was signed into law in 2002. This act increased federal control over education and educational funding, which had traditionally been under the purview of state governments.
Beginning in 2009, however, conservative activists began to rediscover states' rights. One reason may be that in that year the Democrats added the presidency to their control of the U.S. House and Senate. Republicans were shut out at the national level. The ambitious program of the Obama administration also alarmed conservatives. Obama's initiatives generally involved greater federal control of the private sector, not of state and local governments. Still, many conservatives hoped that the states could be a counterweight to the newly active national government.
FEDERALISM AND TODAY'S SUPREME COURT
The United States Supreme Court, which normally has the final say on constitutional issues, plays a major role in determining where the line is drawn between federal and state powers. Consider the decisions rendered by Chief Justice John Marshall in the cases discussed earlier in this chapter. Since the 1930s, Marshall's broad interpretation of the commerce clause has made it possible for the national government to justify its regulation of almost any activity, even when the activity appears to be completely local in character. In the 1990s and 2000s, however, the Court has evidenced a willingness to impose some limits on the national government's authority under the commerce clause and other constitutional provisions. As a result, it is difficult to predict how today's Court might rule on a particular case involving federalism.
The Trend Toward States' Rights
Since the mid-1990s, the Supreme Court has tended to give greater weight to states' rights than it did during previous decades. In a widely publicized 1995 case, United States v. Lopez, the Supreme Court held that Congress had exceeded its constitutional authority under the commerce clause when it passed the Gun-Free School Zones Act in 1990. The Court stated that the act, which banned the possession of guns within one thousand feet of any school, was unconstitutional because it attempted to regulate an area that had "nothing to do with commerce, or any sort of economic enterprise." This marked the first time in sixty years that the Supreme Court had placed a limit on the national government's authority under the commerce clause.
In 1999 and in the first decade of the 2000s, the Court also issued decisions that bolstered the authority of state governments under the Eleventh Amendment to the Constitution. The cases involved employees and others who sought redress for state government violations of federal laws regulating employment. The Court held that the Eleventh Amendment, in most circumstances, precludes lawsuits against state governments for violations of rights established by federal laws unless the states consent to be sued. Additionally, the Court supported states' rights under the Tenth Amendment in 1977 when it invalidated provisions of a federal law that required state employees to check the backgrounds of prospective handgun purchasers.
The Court Sends Mixed Messages
Although the Court has tended to favor states' rights in some decisions, in other decisions it has backed the federal government's position. For example, in two cases decided in 2003 and 2004, the Court, in contrast to its earlier rulings involving the Eleventh Amendment, ruled that the amendment could not shield states from suits by individuals complaining of discrimination based on gender and disability, respectively. In 2005, the Court held that the federal government's power to declare various substances to be illegal drugs superseded California's law legalizing the use of marijuana for medical treatment. Yet less than a year later, the Court favored states' rights when it upheld Oregon's controversial "death with dignity" law, which allows patients with terminal illnesses to choose to end their lives early and thus alleviating suffering.
Recent Rulings on States' Rights
As noted, since President Obama took office conservatives have taken a greater interest in states' rights. A growing number of such cases have been brought before the Supreme Court. In its rulings, the Court has shown a degree of sympathy for states' rights. Yet, it has rejected arguments that would transform the relationship between the states and the federal government.
In one important opinion, the Court found that Arizona had gone too far in its attempt to subject unauthorized immigration to state authority. Under the ruling, Arizona cannot make it a crime when illegal immigrants fail to carry identification papers or attempt to find work. Arizona police cannot arrest individuals solely on suspicion of illegal status.
It was the Court's opinion on the Affordable Care Act, though, that was expected to be the most important states' rights ruling in decades. In the end, the Court's verdict was somewhat anti-climactic - it did not find that Obamacare violated the police powers of the states. Chief Justice Roberts's ruling on Medicaid expansion did hearten states' rights advocates, however. By making Medicaid expansion optional for the states, the Court for the first time put limits on the ability of the federal government to coerce states by withholding grants.
DID YOU KNOW?
-Under Article I, Section 10, of the Constitution, no state is allowed to enter into any treaty, alliance, or confederation.
-State governments in the United States are unitary governments. As a result, most local governments are mere creatures of the states.
-The Liberty Bell cracked when it was rung at the funeral of John Marshall in 1835.
-Only after the Civil War did people commonly refer to the United States as "it" instead of "they."
-Part of the $4.2 million in federal block grants received by four Native American tribes since 1997 has gone toward the building of "smoke shops" - stores that sell discounted cigarettes and pipe tobacco.