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 so-called 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 NationalizationSometimes the reversepolitical process occurs, asgroups that lose at thenational level see smallervictories in those stateswhere they enjoy majoritysupport.

Example: socialconservatives on the issuesof abortion rights andschool 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.