Democracy Under
Pressure
Chapter 3
The Federal System
The Federal System
• In 1995, Congress passed a law allowing states to
determine their own speed limits.
– Many states increased their speeds to 70 miles per hour or
more.
– Why were 55-mile-per-hour speed limits imposed?
• To save gas after oil shortages in the 1970s.
• Insurance industry studies say fewer highway deaths at lower
speeds.
• Same law imposed penalties for not requiring motorcycle
helmet rules and zero alcohol tolerance rules by withholding
federal highway money.
• To get federal funds, states kept lower speeds until Congress
changed the law in 1995.
The Federal System
• The federal system.
– Federalism involves constitutional power-sharing between a
national and regional (state) units of government, each
having their own jurisdictions.
– Not every country has a federal system. For example,
France uses a unitary system of government.
• The nation is divided into administrative units called
departments, uniformly administered through Paris.
• All policies are set by a centralized government.
The Federal System
– Although the national government exercises great power, it
must share power with the states, which in turn exercise
certain exclusive powers. For example, the Rodney King
case of 1992.
• Rioting in Los Angeles erupted when an all-white jury acquitted
white officers of savagely beating Rodney King, a black
detainee.
• Police in Los Angeles were slow to respond, so the governor
called out the California national guard.
• The president placed the national guard under federal control,
and also sent federal agents and troops to put down the
disturbance.
The Federal System
– How power is to be shared in a federal system is the subject
of continuing debate.
• The relationship among national, state, and local governments
touches all lives. It affects the outputs of the political system.
– Federalism is one way to govern a complex nation and has
become popular in the 20th century.
• By 1964, more than half of the world's land mass was governed
by some form of federalism.
• Federal systems include Switzerland, Canada, Australia,
Mexico, India, and Germany.
• Unitary systems include France, Israel, and South Africa.
Democracy Under
Pressure
Federalism: The Pros and Cons
The Pros
• Federalism permits diversity and diffusion of power.
• Local governments, not remote bureaucracies, deal
directly with local problems.
• System allows more levels of government and more
opportunities for political participation.
• Because of diffusion and fragmentation, there is
better protection for individual rights.
The Pros
• Many units of government provide more avenues for
innovation, experimentation, and problem-solving.
Many of FDR's New Deal programs copied the
states.
• It suits a large country with a very diverse population
like the United States.
The Cons
• Federalism permits some state and local areas to
continue race discrimination (Southern school
segregation).
• Under a federal system, special interests and certain
localities may exercise considerable influence on the
politics and economy of a state or locality.
– West Virginia is the second largest coal producer, yet
pockets of poverty exist, due to several factors.
– Special interests-the auto industry or oil-often frustrate
efforts to solve national problems.
– Local officials may understand local problems, but lack the
skill and money of a federal government to solve problems
sufficiently.
The Cons
• Diversity makes national unity difficult and more
costly to achieve.
– Law enforcement and justice may be unevenly applied
among the states.
Democracy Under
Pressure
The Checkerboard of Governments
The Checkerboard of
Governments
• Americans complain they are highly taxed by at least
three levels of government-national, state, and local.
• The Census Bureau counted 87,576 governments.
– This includes 3,034 counties, 19,429 municipalities, 16,504
townships, 13,506 school districts, and 35,052 special
districts.
• Morton Grodzins says the federal analogy is not of a
three-layered (federal, state, and local) cake, but a
marble cake with all parts interlaced.
Cooperation and Tension
• In a system of 87,504 governments, federalism is
seen as a rivalry and a partnership.
• New York almost went into economic default in 1975.
• President Ford declined to help, but later relented
and Congress provided billions in loans, leaving a
bitter and protracted political struggle.
The Changing Federal
Framework
• From the 19th century until 1937, the concept of dual
federalism prevailed.
– This concept holds that the federal government and the
states were seen as competitors.
– The Supreme Court became the referee.
• B. FDR's New Deal social programs changed the
competitive relationship in dual federalism.
– Courts approved of New Deal programs that established
social welfare and public works programs.
The Changing Federal
Framework
– Cooperative federalism emerged in which various levels of
government are seen as related parts of a single
governmental system, characterized by cooperation and
shared functions.
– Michael D. Reagan says no wall of separation should exist
between state and federal government. He says federal
financial aid creates "a nationally dominated system of
shared power and shared functions."
The Changing Federal
Framework
• LBJ called his innovative Great Society programs
"creative federalism."
• Nixon launched "new federalism," which returned
large chunks of federal taxes to the state and local
governments.
The Changing Federal
Framework
• A new concept, regulatory federalism, requires the
states to implement federal programs.
– Regulations dealing with the environment and other
concerns created new requirements for states.
– The Clean Air Act of 1970 set federal standards for air
quality.
– In the mid-1980s, President Reagan proposed that the
states pick up more of the costs of welfare and other social
programs. Congress did not approve.
The Changing Federal
Framework
– In 1996, the Republican-controlled Congress and President
Clinton implemented a law to end the largest federal welfare
program and turned the program over to the states. The
federal government provides block grants to help finance
state programs.
– Many state governors and local officials often complained
that "unfunded mandates" placed the states under severe
financial strain.
• Columbus, Ohio faced costs of $1 billion to comply with the
Clean Water Act and the Safe Drinking Water Act.
• New York City officials estimated costs of $1.3 billion to modify
elevators and accommodate disabled persons.
The Changing Federal
Framework
– One goal of the Republicans' "Contract With America" was to
restrict such unfunded mandates.
– The Unfunded Mandates Reform Act became law in 1995,
requiring Congress to fund mandates placed on the states
unless a majority of the House and Senate voted not to do
so. The law only applies to new legislation.
– In 2002, Congress passed the No Child Left Behind Act, with
the goal of insuring that all students were proficient in
reading and math.
Democracy Under
Pressure
The Historical Basis of Federalism
A Middle Ground
• James Madison wrote to George Washington,
arguing that while the states could be completely
independent, the creation of "one simple republic"
would be "unattainable."
• The bargain struck at Philadelphia in 1787 created
the concept of a federal system, with its sharing of
power by the states and national government.
A Middle Ground
• There are a number of reasons why a stronger
central government would have been unacceptable.
– Public opinion would not have permitted the adoption of a
unitary form of government. Loyalty to the states was strong.
– The diversity of Americans-via regional interests, slow
transportation, and great distances-worked against the
establishment of a stronger central government.
– Federalism was seen as an effective device for distributing
authority between states and the central government.
A Tool for Nation Building
• The collapse of European colonial states after World
War II confronted Asia and Africa with an urgent
problem: how to organize their new nations.
– Create a strong central government and exchange one form
of imperialism for another.
– Unite in some kind of federation, permitting a semblance of
self-governance.
• In the United States, federalism permits a disunited
population to join a political union, but allows some
room for the development of a national identity.
Democracy Under
Pressure
The Constitutional Basis of Federalism
Federal Powers:
Enumerated, Implied, Inherent,and Concurrent
• The Constitution established a framework for the
American federal system.
– Enumerated powers are specifically granted to the three
branches of the federal government. For example, Congress
has the power to coin money.
– Implied powers flow from the enumerated powers and the
elastic clause to give Congress the power to make all laws
"necessary and proper" in order to carry out its enumerated
powers.
Federal Powers:
Enumerated, Implied, Inherent,and Concurrent
• The Supreme Court has also held that the federal
government has some "inherent" powers that it may
exercise simply because it exists as a government.
– One inherent power is the right to conduct foreign affairs.
– The Court ruled in the Curtiss-Wright case that the "war
power" is an inherent power.
• The federal government and the states also have
concurrent powers.
– One concurrent power is the power to tax, a power shared
by both the federal and state governments.
– However, states cannot exercise powers belonging only to
the federal government, nor can they take actions that
conflict with the federal government.
The Supreme Court as
Umpire
• The Supreme Court serves as an arbiter in questions
of state versus national power.
• At times, the Court supports states' rights, and at
other times it has supported federal power.
– B. McCulloch v. Maryland (1819).
• Ruling by Chief Justice John Marshall established the
doctrine of implied powers giving the federal
government the steps to move beyond the language
of the Constitution.
The Supreme Court as
Umpire
• At issue: Can the state of Maryland level taxes
against a federal institution? Can Congress create a
bank?
• At stake: What powers can be inferred by the federal
government when invoking the "necessary and
proper" clause?
• Marshall ruled that the Tenth Amendment did not
prohibit the exercise of implied powers.
The Supreme Court as
Umpire
• Marshall also ruled against the state, arguing that
their power to tax was an effort to destroy, so
therefore, the Maryland law was unconstitutional.
• As Chief Justice, Marshall established the concepts
of implied powers, broad construction of the
Constitution, and national supremacy.
The Division of Federal and
State Power
• The Tenth Amendment seems to limit Congress to
powers specifically enumerated and delegated to the
federal government by the Constitution.
• In McCulloch, Chief Justice Marshall emphasized that
the Tenth Amendment does not use the word
"expressly" before the word "delegated."
• In 1789, James Madison and others blocked the
attempt to limit federal powers to those "expressly"
delegated.
The Division of Federal and
State Power
• Chief Justice Taney invoked the Tenth Amendment to
protect the power of the states.
• Following World War I, the Court invoked the Tenth
Amendment to invalidate a series of federal laws
dealing with child labor and regulating industry and
agriculture.
– In 1935, the National Industrial Recovery Act was declared
unconstitutional.
– In 1937, the Court upheld the social security program and
the National Labor Relations Act.
– In 1941, the Court upheld the Fair Labor Standards Act.
The Division of Federal and
State Power
– In 1976, the Court struck down a federal law extending
federal minimum wage and maximum hour provisions to
state and municipal workers. However, that ruling was
overturned in 1985. That was struck down in 1985's Garcia
v. San Antonio Metropolitan Transit Authority.
– In 1995, the Court struck down the Gun-Free School Zones
Act by stating the Congress has exceeded its authority when
it passed a law making it illegal to carry a gun within 1,000
feet of a school.
The Division of Federal and
State Power
– In 1996, the Court ruled that Congress could require the
states to negotiate over gambling casinos with Indian tribes.
– The Court also invalidated a key section of the Brady Law
that required local sheriffs to check the backgrounds of gun
buyers, declared states immune from lawsuits for violation of
federal labor laws, struck down a key provision of the
Violence Against Women Act (1994), and held that states
need not respond to private complaints put to federal
agencies.
The Division of Federal and
State Power
• Many state's rights advocates depend on the
language of the Tenth Amendment for support.
– They view the Constitution as a compact among states.
– In can be argued that the national government is often
viewed as representing the people, not just the states.
• The "supremacy clause" makes it clear that the
Constitution and federal laws and treaties are the
supreme law of the land, prevailing over any conflict
with state laws and constitutions.
The Division of Federal and
State Power
• Among many restrictions, states are forbidden to
make treaties, coin money, or pass bills of attainder
or ex post facto laws.
• The Bill of Rights and the Fourteenth and Fifteenth
amendments place further restrictions on the states.
• Local governments derive their powers from the
state, so state limits apply to them as well.
The Division of Federal and
State Power
• Federal obligations to the states
– Guarantee a republican form of government to every state.
– Protect the states from invasion or domestic violence.
– Congress may admit new states:
• Passing enabling legislation to admit new states.
• Permitting them to write a state constitution.
• Pass a joint resolution recognizing the new state.
The Division of Federal and
State Power
• Interstate Relations
– Full faith and credit: States are required to give "full faith and
credit" to the laws, records, and court decisions of another
state.
• Normally means civil judgments made in a court in one state
are expected to be recognized in another.
• However, marriages legal in one state might not be recognized
by another state. Example: the Williams v. North Carolina case,
– Privileges and immunities: Citizens of each state are entitled
to the privileges and immunities of citizens of the state they
are currently in.
• States still discriminate. Example: in-state and out-of-state
tuition for college students.
The Division of Federal and
State Power
– Extradition: Upon request, a governor in one state can hold a
person accused of a crime in another state, pending the
person's being returned to the original state for disposition of
the case against him/her.
• Past governors have sometimes refused to extradite, especially
in the cases of blacks who escaped from the South
• The Scottsboro case is another example.
The Division of Federal and
State Power
– Interstate compacts: States may enter into agreements with
other states only with the approval of Congress.
• One example: The New York Port Authority, which allows New
York and New Jersey to jointly operate three airports,
Manhattan's bridges and tunnels, and the world's largest bus
terminal.
• Interstate compacts are a useful tool for planning and
cooperative development in bi-state metropolitan areas,
especially in the 20th century.
Democracy Under
Pressure
The Growth of Strong National
Government
The Rise of Big Government
• As society grew more complex, the need to manage
that population has spurred the growth of the national
government.
• The power to tax and spend for the general welfare
have expanded.
• Many of the social welfare programs took place under
FDR's New Deal in the 1930s and in the 1960s under
LBJ's Great Society.
The Rise of Big Government
• "The Reagan revolution."
– Cut domestic spending in poverty programs like social
welfare, food stamps, and housing subsidies for low-income
people. The upshot: the poor got poorer.
– Some confusion mounted regarding what was accomplished:
In many cases, the cuts were reductions in what might have
been spent.
– Still, the impact was measurable: Most of the budget cuts
landed heavily on the poor.
• According to the Congressional Budget Office,
incomes of the very rich rose 75 percent
The Rise of Big Government
• Under House Speaker Newt Gingrich, Congress
dismantled and modified many programs and shifted
the bulk of the federal welfare program over to the
states.
• Yet, the role of the national government is still
debated. Many Americans still look to the national
government to solve national problems.
Big Government and Foreign
Policy
• The responsibility of the federal government for the
conduct of foreign affairs in the nuclear age has
increased the size of the national government.
– In 2005, the budget for national defense is estimated at more
than $407.7 billion (16.7 percent of the federal budget).
• The State Department, CIA, and the National
Security Agency have also increased in size.
• Even with the collapse of the Soviet Union and the
lack of a military threat, defense spending remains
high because defense industries provide jobs for
many Americans.
Democracy Under
Pressure
The Impact of Federalism on Government
and Politics
Federalism and Government
• Each state gets an equal number of senators, despite
its size.
• House members are chosen in local districts. They
constitute an informal delegation from each state.
• Federalism helps assure that the state and local court
systems coincide with the federal system.
• Federalism encourages senatorial courtesy, in which
the president consults with senators of his party in a
state before making an appointment.
• The AFL-CIO, AMA, and ABA demonstrate that large
interest groups also organize along federal lines.
Federalism and American
Politic
• Senator John Kerry of Massachusetts came from
behind in the Iowa caucuses in January, defeating
rivals Senator John Edwards of North Carolina and
Governor Howard Dean of Vermont.
• As a rule, national political candidates achieve victory
long before their party conventions.
• National political parties are organized along federal
lines, as a federation of fifty state parties precariously
held together by a national committee.
Federalism and American
Politic
• State political machinery takes on special importance
in building state parties and potential national
leaders.
• State political systems vary greatly: in some states,
there is lively competition, but in others, one party
dominates. The quality of their performance also
varies.
Federalism and American
Politic
• Policy outcomes in the states
– Does the nature of a political system in a state affect the
types of public policies adopted in the state? In other words,
do the politics of a state make a difference? Answers vary.
– States with large, two-party elections are likely to enact
broad social welfare policies because both parties need the
votes of the poor.
– Later studies show that socioeconomic factors, rather than
political, seem to account for most of the differences in
welfare expenditures and for differences in taxing, spending,
and social services between states.
Federalism and American
Politic
– Another study concluded that if taxing and spending were
measured in terms of their redistributive impact, then the
politics of the state was more important than the economics.
– The federal system influences people's lives because the
quality of the services provided by the states varies greatly.
Democracy Under
Pressure
Federalism Today
Federalism Today
• The Budget of the United States Government, Fiscal
Year 2005 is a black-and-white volume the size of a
telephone book and four-and-a-half inches thick.
– Federal aid to the states has increased every year since
1950, with an estimated $416.5 billion going to the states in
fiscal year 2005.
– Categorical grants are also known as grants-in-aid. They are
earmarked for specific purposes like Medicaid, pollution
control, schools, and hospitals.
– Block grants are used for community development.
– General purpose grants may be used by states and localities
as they wish.
Categorical Grants
• The bulk of federal aid comes as categorical grantsin-aid.
• This is money paid for specific purposes, as spelled
out by law or administrative regulations.
• Typical grants were in the fields of education,
pollution control, and Medicaid.
Categorical Grants
• Requires state and local governments to meet
matching requirements. That is, the recipients must
put up some of their own funds in order to get federal
funding.
• Requirements are determined by a formula that
considers the ability of the state to pay: Poor states
pay less than rich states. However, all states pay the
same matching share.
Block Grants
• These are used broadly at the recipient's discretion.
• Major ones were community development, social
services, health care, employment, and training and
education.
Where the Money Goes
• In fiscal 2005, an estimated $416.5 billion will be
spent on states.
• Almost all will go to categories that include health,
education and employment.
• Fiscal headaches in the federal system.
– State and local spending has increased at a faster rate than
federal spending.
– Yet, the federal government collects 81 percent of the
income tax, four times as much as the states.
– Local governments rely on real estate taxes, and states rely
heavily on sales taxes, both of which grow less rapidly than
the economy as a whole.
Regulatory Federalism
• In the 1960s, regulatory laws were passed to impose
strict standards on state and local governments.
– 1. Clean Water Act required cities to spend $120 billion on
building wastewater treatment plants.
– 2. Other examples: Civil Rights Act (1964), the Highway
Beautification Act (1965), and the Occupational Safety and
Health Act (1970). Other programs deal with endangered
species, clean water and air, education, employment, the
disabled, and age discrimination.
– 3. Equal Employment Opportunity Act (1972) bars job
discrimination on the basis of race, religion, sex, and
national origin.
Democracy Under
Pressure
The Future of Federalism
The Future of Federalism
• The relationship between Washington, the state
houses, and city halls has evolved over the years.
Both conflict and cooperation remain.
• New ideas have been introduced:
– Minnesota revamped a system of school aid to ensure equal
funds for students, regardless of the wealth of the district.
– By the mid-1990s, two-thirds of the states and the District of
Columbia had adopted a "circuit breaker" system of
property-tax relief for low-income homeowners and the aged.
– The vast problems of metropolitan areas provide one of the
greatest challenges to the federal system. More efforts are
being made at developing new approaches.