Federalism
• Under the Articles of Confederation, voters
bequeathed power to the state and local
govt’s, which then bequeathed power to the
federal gov’t.
– High transaction costs/lots of free-riding by states
• During the Constitutional Convention, the
founders sought to limit transaction costs by
striking a balance between state and federal
power
Federalism
• Building off Montesquieu, the Anti-Federalists
took issue with this ‘balance’. They argued
that a large republic could never succeed.
– Favored a confederation—where states were
sovereign.
• In a federal system, authority is divided
between 2 or more levels.
– In the U.S., between national(federal) and states.
American-Style Federalism
• Federalism is a hybrid agreement
– Mixes elements of confederation (lower level has
real power) and a unitary gov’t (national level has
the power).
• Before adopting a federal system in the
Constitution, U.S. had experienced both of
these:
– Monarchy/parliament—unitary
– Articles of Confederation--confederation
American-Style Federalism
• Most democracies in the world are unitary
systems
– Central gov’t establishes national policies and
raises and distributes funds to local units to carry
them out.
• Lower-level units function primarily as the
administrative apparatus of the national gov’t
Qualifications of Federal Systems
• A government must have constitutional relations across levels,
interactions that satisfy three general conditions:
– 1. The same people and territory are included in both
levels of government.
– 2. The nation’s constitution protects units at each level of
government from encroachment by the other units.
– 3. Each unit is in a position to exert some leverage over the
other.
Qualifications of Federal Systems
• The 2nd condition, independence, sets the
stage for the 3rd condition, mutual influence
• Independence was the missing ingredient that
made the national gov’t impotent under the
Articles of Confederation.
Qualifications of Federal Systems
• Note also that local governments are not a
separate level of government.
• They are established by the state and do not
exercise independent, constitutional
authority.
• State law establishes their responsibilities and
the extent of their discretion over policies.
Types of Federalism
• Two distinct forms of American federalism
have been identified:
– Dual Federalism
– Shared Federalism
Dual Federalism
• The simplest possible arrangement.
• This type of federalism leaves the states and
the national government presiding over
mutually exclusive “spheres of sovereignty.”
• The nation, however, has never divided
authority so neatly.
Dual Federalism
• From the early days of quite limited responsibility
for the national government, nationalization has
shifted authority to the national side and away
from state govt’s.
• Today the national government has a hand in
almost all policies that “concern the lives” of the
citizenry.
• Dual federalism no longer describes that nature
of federal-state relations.
Shared Federalism
• The second and more accurate conception of
federalism is called shared (or “cooperative”)
federalism.
• It recognizes that the national and state
governments jointly supply services to the
citizenry.
• Over the years progressive nationalization has
moved American federalism from mostly dual to
mostly shared.
Shared Federalism
• Often the scope and complexity of modern problems
mandate a joint, cooperative strategy across states
and levels of government.
• Critics of nationalization argue that the federal
government has so intruded into the traditional
responsibilities of states and local communities that
even “shared” federalism is a misnomer.
• But if there have always been critics, how did we get
to this point?
Shared Federalism
• Why have states’ rights advocates had difficulty
partitioning federal and state responsibilities?
• As national politicians sought to expand their
authority over the years, they discovered that the
wall between the federal government and the states
was not impregnable.
– The Constitution leaves ample room for a variety of
federal-state relations.
• Moreover, when nationalization of public policy
proceeded, it rarely triggered a constitutional crisis.
Shared Federalism
• But the question of whether or not the federal
gov’t actually assumed responsibility for a
specific policy remained (and still is) a political
decision
Shared Federalism
• South Dakota v. Dole (1987)
• South Dakota, allowed 19-year-olds to purchase beer
containing up to 3.2% alcohol.
• In 1984, the United States Congress passed the
National Minimum Drinking Age Act, withholding
highway funds from states that did not adopt a
minimum legal age of 21.
• South Dakota challenges the law and loses 7-2. The
ruling argues that this is a valid exercise of federal
authority under the “necessary and proper clause.”
Federalism and the Constitution
• The greatest victory of states’ rights during the
Constitutional Convention was the creation of
a Senate whose members were to be selected
by the state legislatures.
– Thus, senators are beholden to the state
legislators.
Federalism and the Constitution
• The ratification of the Constitution was by state
conventions that directly represented the people,
not by the state governments themselves.
• Thus the people created the government, not the
states.
• Language governing the relationship of the national
government to the states runs throughout the
Constitution. But the end result was a system open
to nationalizing forces.
The Supremacy Clause
• “This Constitution, and the Laws of the United States
which shall be made in Pursuance thereof [that is, in
keeping with the principles of the Constitution] … shall
be the supreme law of the land.”
• The provision of the Constitution with the most profound
implication for modern American federalism is the socalled supremacy clause in Article IV.
– This clause does not give the federal government free license.
– Framed to avoid impasses over jurisdiction rather than to cede
to the national government broad, preemptive authority over
the states.
The Powers of Congress
• Article I, Section 8 lists powers of Congress
(expressed/enumerated powers).
• These powers are important to federalism because they
create jurisdictional boundaries between the states and the
national government
The Powers of Congress
• Some powers are broadly stated and thus
helped open up state policy to national
intervention.
– Example: the commerce clause.
• In addition, the elastic clause (necessary and
proper clause) also eventually undermined the
restrictive purpose of the enumerated powers.
The Tenth Amendment
• Given the fear of tyranny as articulated by the
Antifederalists, it is not surprising that Madison had
to promise the addition of a Bill of Rights as an
incentive for ratification.
• Many members of the first Congress wanted
protections for the states as well as for individual
citizens.
• The Tenth Amendment reserves to the states (or the
people) all powers not directly given to the national
government.
The Tenth Amendment
• The Tenth Amendment offers the most explicit
endorsement of federalism to be found in the
Constitution.
• Yet despite its plain language, the Tenth Amendment
has failed to play a major role in fending off national
authority.
• Why?
– The powerful combination of the supremacy and the
elastic clauses.
Interpreting Constitutional
Provisions
• Sweeping language with which the
Constitution variously endorses national
power and states’ rights has given politicians
easy openings to interpret the Constitution
according to their own political objectives.
• The “wall” between the federal government
and the states is not as impregnable as the
Framers had supposed.
Interpreting Constitutional
Provisions
• The Framers envisioned the Supreme Court as the
referee of disputes between national and state gov’t
– When resolved, created powerful precedents
– Allowed national policy to develop free of state prerogatives.
• McCulloch v Maryland
– Protected national gov’t from actions of states.
• Gibbons v. Ogden
– Only Congress possesses authority to regulate commerce.
• Garcia v San Antonio Metro Transit Authority
– Federal wage hours applied to state and local employees
McCulloch v Maryland (1819)
• Can Congress charter a
bank?
• It does and it’s
unpopular
• Maryland levies a 2%
tax.
• James McCulloch (bank
agent) refuses to pay.
McCulloch v Maryland
• It goes to Supreme
Court.
• Two main questions:
– Can Congress charter a
bank.
– Can a State tax Federal
entity?
Answers…
• (1) Yes. Under the necessary and proper
clause, this is a Constitutional exercise of
federal power.
• (2) No. The 10th Amendment reserves to the
states only powers not delegated to the
federal government, which has the power to
tax. Also, the Supremacy clause kicks in here
as “the power to tax involves the power to
destroy”.
Gibbons v Ogden (1824)
• NY state legislature
gives Ogden steamboat
monopoly.
• NJ steamboat operator,
Gibbons, tries to steal
some of the business.
• Ogden is upset—
pressures NY to act.
• Gibbons hires Webster
and goes to SC.
Gibbons v Ogden (1824)
• The 2 big questions:
• Does the Constitution
permit the federal govt
to regulate navigation?
• Is the NY monopoly
Constitutional under
the 10th amendment or
does this violate the
Commerce Clause?
Gibbons v Ogden-the answers
• Yes. Commerce is more than just buying and selling
while the power to regulate commerce within a state
belongs to the state, commerce among not stop at
the border.
• No. The NY monopoly is unconstitutional because
the Supremacy Clause gives the federal govt’s laws
precedent here despite the 10th Amendment. (but
only because the fed gov’t chose to regulate).
Nationalization
• Bottom line: Power is
shifting from the states
to the federal gov’t.
• The 10th Amendment
usually loses at the
Supreme Court level.
• It’s kind of like the Ohio
State of Amendments.
The Logic of Nationalization
• How does policy become nationalized?
• Generally 2 scenarios:
– Realities of collective action (problem solving)
– Purely political considerations (i.e. opportunities
for political advantage).
The Logic of Nationalization
• The road-building game illustrates an important lesson in
federalism: a state’s jurisdiction over public goods that fall
within its borders offers real advantages: efficiency and
responsiveness.
• But once the public good encompasses the larger community,
the logic for local control disappears.
• Throughout the first half of the nineteenth century, America
remained a nation of segmented communities that did not
require much coordination of commercial endeavors.
The Paths to Nationalization
• The logic of collective action has assumed several forms
• First, Americans have at times decided to adopt policies
of such magnitude and scope that they outstripped the
resources of states
• Second, states have solicited federal intervention when
they could not solve their problems by working together.
• Finally, political considerations inspired national
majorities to insist on federal involvement in what were
formally state and local matters
Historic Transfers of Policy to
Washington
Roosevelt’s New Deal (1930s)
LBJ’s Great Society (1960s)
Both broadened the scope of federal responsibilities and were
accompanied by large national majorities to Congress from the
president’s party. A mandate for new collective goods.
FDR and the New Deal
• In the 1930’s President
Roosevelt expanded the
power and scope of the
federal gov’t to
unprecedented levels.
• Gave rise to fierce battles in
the court.
– At first, FDR lost.
– By the late 1930s, the
court had changed its
tune and began to
support expansion of the
federal gov’t.
New Deal
• Roosevelt’s New Deal was a
comprehensive set of
economic regulations and
relief programs (massive in
size and scope) intended to
fight the Great Depression.
• To justify its unprecedented
intervention in the
economy, FDR invoked the
commerce clause.
LBJ and the Great Society
• Elected in 1964, Lyndon Johnson
and his Democratic Congress
launched a War on Poverty – part
of a Great Society agenda.
• Passed more than 100 new
categorical grant programs. Spent
over $5 billion 1964-65.
• Grants supplemented state
programs/national goals.
• Traditional state and local
responsibilities became federal
ones.
Nationalization: The Solution to States’
Collective Dilemmas
• The kinds of collective action dilemmas that
prompt states to ask Washington for help
often fall into one of three categories:
(1) Coordination problems.
(2) Reneging and shirking.
(3) Cutthroat competition.
Coordination Problems
• A nation composed of fifty states is bound to
face coordination problems.
• Example of driver’s license laws:
– Lobby for standardization for interstate truckers – what led
to this federal intervention?
– Creation of bureau within DOT to centralize records of
traffic violations.
– Easier to create centralized record keeping than to require
each state to update its records with those of every other
state.
Reneging and Shirking
• States may not always honor their
commitments to their sister states.
• The Constitution and national laws solve many
of these dilemmas by authorizing the federal
government to take direct action raising
resources and administering policy.
– Example: polluted air/water. Without enforcement
states continue to pollute.
Cutthroat Competition
• Under the Articles of Confederation each state
was free to conduct its own international
trade policy.
– Foreign governments and merchants would exploit the
competition among the states for their own ends.
– Classic prisoner’s dilemma -- why?
– Negotiating from a united front the best strategy, but
states underbid each other or engaged in cutthroat
competition.
Cutthroat Competition
• At various times cutthroat competition has prompted
state officials to lobby Washington to prevent bidding
wars.
• Examples: minimum wage standards, environmental
regulation.
• Competition can also emerge as states bid against each
other for economic reasons – getting companies to
relocate to their state by providing tax breaks or special
services.
• States spend as much as $40 billion annually to lure and
retain large employers to their states.
Political Logic of Nationalization
• Sometimes those promoting a policy find that
it is in their interest to shift their focus from
the states to the national government. Why?
– Difficult to lobby/persuade fifty separate states.
– More efficient method – a single federal law can
change policy in all fifty states at once.
– National government may be more receptive
Political Logic of Nationalization
Sometimes the reverse
political process occurs, as
groups that lose at the
national level see smaller
victories in those states
where they enjoy majority
support.
Example: social
conservatives on the issues
of abortion rights and
school prayer.
Modern Federalism
• National government’s primacy in setting domestic
policy is secure.
– Recent Supreme Court decisions.
• Limit federal government.
• Gains have been modest.
• Easily circumvented by an alternative strategy of
financial inducements.
• Preemption legislation.
– Less so than sharing responsibility.
• Carrots and sticks.
Preemptive Legislation
• Federal laws that assert the national government’s
prerogative to control public policy in a field.
– Relatively little preemption prior to the New Deal. Afterwards, much
more.
– Owes its existence to the supremacy clause.
• On balance, federal government has not usurped states’
jurisdictions so much as it has joined with the states in
formulating policy.
– Result: shared federalism.
• How does the federal government induce cooperation from
the constitutionally independent states?
– Carrots and sticks.
The Carrot: Federal Grants to the
States
• During the last fifty years federal grants-in-aid
became an important part of intergovernmental
relations.
– Few grants prior to New Deal.
• All of these programs enlist categorical grants, in
which federal dollars are tied to particular programs
or categories of spending.
• These grants are inducements to states to carry out
particular programs, but they also allow the national
government to define these state programs.
THE HISTORICAL TREND OF FEDERAL GRANTS-IN-AID
The Carrot: Federal Grants to
States
• Another alternative to
categorical grants: block
grants.
• Like categorical grants,
funds are appropriated to
achieve a particular policy
goal with specific
administrative procedures.
• Policy targets are only
generally stated.
• Fewer strings are attached.
From carrots to sticks
• Unfunded mandates
– National standards imposed on state/local
governments by the federal gov’t without funding.
• National elections.
• Indigent legal representation.
• No Child Left Behind
– Unfunded Mandates Reform Act (1995)
• Requires fed to pay for programs over $50 million.
Methods Used to Prescribe State
Policy
• The national government uses four basic
methods to prescribe state policy and
supervise its administration.
1. Cross-cutting requirements.
2. Crossover sanctions.
3. Direct orders.
4. Partial preemption.
Cross-Cutting Requirements
• Statutes that apply certain rules and
guidelines to a broad array of federally
subsidized state programs.
– Example: failure of any state to follow federal
guidelines that prohibit discrimination can result
in the prosecution of state officials as well as loss
of grants.
• Has been used to enforce civil rights laws.
Crossover Sanctions
• Stipulations that to remain eligible for full
federal funding for one program a state must
adhere to the guidelines of an unrelated
program.
– Example: Congress’s stipulation that federal
highway funds be tied to state adoption of a
minimum drinking age of twenty-one.
– Example: bill restricting sale of soft drinks on
school grounds tied to school aid funds.
Direct Orders
• Requirements that can be enforced by legal
and civil penalties.
• Example: The Clean Water Act.
Partial Preemption
• Certain federal laws allow the states to administer
joint federal-state programs so long as they conform
to federal guidelines.
• If an agency fails to follow the instructions of the
federal agencies, the state might lose control of the
program.
– Example: state air pollution policies.
– Public law and the EPA set minimally acceptable standards,
but enforcement of these standards rests mostly with state
agencies.
Trends in the Federal Regulation
of the States
• Before the 1970s:
– Federal grants plentiful.
– Few regulatory policies in place.
• Since the 1970s:
– More coercive forms of regulation, direct orders and
partial preemption favored.
– Federal regulation of states concentrated in two areas:
• Environment.
• Civil rights.
Federalism: A Byproduct of
National Policy
• Federal-state relations are dynamic.
– Dramatically transformed during the twentieth
century.
• Nationalization of public policy is not based on
a grand design planned by the Framers.
• Product of the interplay of political interests.
– Problem solving.
– Constituency service.
• Likely to continue in this form.
Executive-Legislative relations
• Post-Watergate
– Congress put lots of limits on the President.
• Reagan era
– Reagan played nice with Congress and won back some
powers
• But a spot of bother over illegally funding an illegal war.
• Clinton got impeached.
• W “the Decider” fought over exec privilege.
– Confidential communications not to be shared with Congress
• Obama and the current Congress—at each other’s throats.
Supreme Court and SOP
• Judicial Review
– Idea that the courts can decide on the
Constitutionality of acts of other branches.
– Periods where the court has been more/less
active, but judicial review is relatively uncommon.
• Generally more pro-President.
– Some exceptions (Nixon and Clinton, for example)
A NEW FEDERAL SYSTEM? THE
CASE RECORD, 1995–2006
• More judicial activism lately.
• Less deference to Congress.
• A push back to states’ rights.