Federalism

What is federalism? We brought up this term in discussing underlying concepts within the Constitution. Federalism refers to a governmental system where the powers are divided between a national government and state governments.

When the Constitution was written, the concept of federalism worked in a manner in what political scientists call dual federalism. This particular type of federalism meant the national government exercised powers only specifically defined for them in the Constitution, while states retained the authority to exert power over issues not spelled out in the Constitution (per the 10th Amendment). In this, neither the national government nor the states attempted to infringe upon the authority of the over. The national government maintained its defined role, as did the states. Because of the nature of each layer of government staying within its sphere of influence, dual federalism is often referred to as layer cake federalism.

The United States operated fairly well under this system of federalism for a few decades, however, certain issues of governmental power came under dispute, particularly that of slavery. Southern states argued that slavery could not be limited or regulated by the national government, while the national government sought to limit territories where slavery could exist. The defeat of the Southern states in the American Civil War meant the national government would impose its will upon states, and do it by force, if necessary. This shifted the government from dual federalism to "marble cake" federalism.

Who doesn't like cake?

The system of marble cake federalism sees a mixing or intertwining of powers in the government. Where dual federalism has each level of government respecting the 'turf' of the other, marble cake federalism has the two levels of government attempting to infringe on the powers of the other. In most instances, it has been the national government usurping powers that had traditionally been exerted by the states. For instance, advocates of states' rights have complained about the No Child Left Behind Act of 2001, which is a law requiring massive education reform. The belief is that the federal government has no authority to make laws about education, since education isn't specifically mentioned in the Constitution.

Currently, many politicians have campaigned that the nation needs to see a return to dual federalism, arguing it was the intent of the Framers of the Constitution.

Can you answer: What is more appropriate for the United States -- dual federalism or marble cake federalism? Can you think of examples of where the national government has exerted more authority than what it was intended to have?

Marble cake federalism regressed somewhat during the 1980s under the administration of President Ronald Reagan. He believed in a less involved federal government that should return powers to the states in a process called devolution. However, since Reagan left office, the idea of scaling back the national government's power doesn't seem to be catching on.

If keeping a balance of power between the national government and states is so difficult, why not work under some other system? Why not provide most of the power to the national government or simply allow the states to retain most of the power?

Some nations use what is called a unitary system, where there is a strong, central government retains virtually all authority, and lower levels of government exist, but they exist only the carry out the will of the central government. Great Britain and China are examples of nations that have a unitary system. It doesn't matter that one is a form of democracy and the other is under communist authoritarian rule. The national government in each nation tells the lower levels of government what to do, and those state or regional governments carry out the policies. The United States opted to stay away from a unitary system because that is precisely what they escaped when they won the Revolutionary War against Great Britain.

Other nations have attempted to use another system called a confederation. This form of governmental system has most authority retained in the state governments. A national government exists, but is very limited in the scope of its power. Confederations aren't typically a popular choice, but one example in the modern day is the European Union, where member states retain their ability to choose what to do with respect to their individual nations, but work together in an economic alliance with some agreed upon features, such as the Euro, a common currency. During the American Civil War, the Southern States formed what they called The Confederate States of America, where individual states held their autonomy and their national government was very limited.

The reason that the United States doesn't use a confederation is pretty simple -- we already tried it under the Articles of Confederation. And that experiment failed, resulting in the United States balancing the power in a federalist system.

Can you answer:  what advantages do unitary systems and confederations have?

Benefits of federalism

Though federalism was the default choice when the Framers wrote the Constitution, federalism presents several benefits that can't be obtained in a unitary or confederate system.

Federalism provides unity without uniformity. This means that a strong national government can set policies that affect the entire nation, however, because the powers of government are divided with the states, each individual state can create most of its own policies that would distinguish it from others.

Unity without uniformity ... each state a laboratory of democracy.

Because so many things aren't mentioned in the Constitution, states can differentiate themselves on a number of issues. For instance, states have varying stances about gun laws because Congress' powers don't mention firearms. West Virginia has very loose requirements about firearms and obtaining a concealed weapons permit, while New York has very strict regulations on the purchasing and use of guns. This reflects the differences in people from different states.

However, the national government still has the power to create those important national standards that need to be unified, such as declaring war or coining money. The people of the country are better served by a law that requires us all to have one standard currency. Leaving this power to the individual states would cause arguments about currencies and exchange rates that complicate life.

The system of federalism also encourages experimentation with new policies. Because so many powers are left to the states, they are free to try new laws in various states. If the policies catch on, other states and the national government may seek to adopt the policies. If a policy is a poor idea, then only one state is troubled and the whole nation isn't adversely affected.

This concept has been very beneficial to the nation. Wyoming was the first state to give women the right to vote, and that concept eventually swept the nation, resulting in the 19th Amendment to the Constitution. Some ideas don't always catch on. Nevada allows limited measures of prostitution within its borders. Other states have not chosen to follow that example.

Federalism also provides training ground to politicians. Because state and local governments actually make important decisions that affect the lives of people, the politicians who serve at those levels are well prepared to take on the issues that affect the entire nation. It's similar to the way the professional baseball players rarely start in the Major League. Most players have to spend time playing in minor leagues to sharpen their skills before they're ready to play against the best in the game. Few politicians ever start at the national level.

Key Powers of the National Government

The national government is limited in the range of its powers, but some of these powers are more significant than others.

The most significant of federal powers is that of taxation. For the national government to carry out its goals and implement its policies, it needs money. To have an effective armed forces, to build infrastructure (roads, bridges, railways, utility lines, etc.), or any number of other government activities, tax dollars must be raised. This power of the federal government is a necessary evil if we want services that serve the common good.

The power to declare war is also one of the more prominent features of the national government. Only the national government has the authority to engage the country in an armed conflict. States are specifically forbidden from going to war with one another or going to war against another nation on their own.

Because, well, why not?

Another important facet of the government is the concept of national supremacy. Though the power of government is divided between the national and state governments, the national government will win out when a conflict arises between the two levels. The Supremacy Clause in Article VI of the Constitution guarantees that in the event of a conflict between the levels of government, the Constitution and all laws made pursuant to the Constitution are the Supreme Law of the Land.

States have typically not accepted the Supremacy Clause as the final word on disputes between themselves and the national government. Advocates of states’ rights believe in the doctrine of nullification. The concept of nullification suggest that if states believe the national government has exceeded its authority under the Constitution, then states have a right to ignore or invalidate that action by the national government.

Nullification was strongly supported in two early American documents, the Virginia and Kentucky Resolutions, written by James Madison and Thomas Jefferson (respectively). Madison and Jefferson wrote these statements in response to laws passed by the John Adams administration that they believed to be in violation of the Constitution.

Can you answer: how is the concept of nullification related to Locke's social contract theory?

One of the more important powers of the federal government is their ability to regulate interstate and foreign commerce. This power was included in the Constitution because of the failures under the Articles of Confederation. The national government can apply a uniform set of regulations about commerce (business and economic activity) that takes place between the states. This means the national government has the authority to make laws about anything that is related to interstate commerce. Individual states still retain the authority to make laws about intrastate commerce, which is economic activity that only occurs within that state.

The question of regulating interstate commerce did not come into question until 1824, when the Supreme Court heard a case that involved the principle of federalism, and the interstate commerce clause. The state of New York had granted Aaron Ogden exclusive rights to operate steamboats that ran from New York to New Jersey. Ogden's main competitor in the steamboat business, Thomas Gibbons, began to operate steamboats on the same waterways as Ogden, defying New York's orders. However, Gibbons had been given permission to navigate steamboats on the water by the national government. The conflict resulted in an interesting question -- what happens when a state's laws and regulations conflict with the national government's?

Ogden sued Gibbons, and the case eventually went to the Supreme Court. In the case Gibbons v. Ogden (1824), Chief Justice John Marshall and the Court had to address a significant question:

• Did the state of New York overstep its authority in attempting to exercise a power reserved for the national government, namely the power to regulate interstate commerce?

In this instance, Marshall and the Court ruled in favor of Gibbons for two main reasons. First, when a national law and state law are in direct conflict, the Supremacy Clause dictates the national law takes precedence. Secondly, the Constitution is very clear that the power to regulate interstate commerce rests only with the national government.

The Chief Justice

When the Constitution was written in the 18th century, a large amount of economic activity did take place within individual states, meaning states still had the ability to determine much of its own policies. However, in the 21st century, most any economic activity involves some sort of interstate transaction, meaning the federal government has the authority to make laws about nearly any business or industry.

The commerce clause has been used by the federal government to justify creating laws about many different aspects of society that are not specifically mentioned in the Constitution. The federal government has greatly expanded their power, particularly with two modern cases.

In Gonzales v. Raich (2005), the Supreme Court ruled that the federal government had the authority to make laws about drug usage due to a very broad interpretation of the commerce clause. In this case, Angel Raich was a California citizen who had been prescribed marijuana as a pain reliever while she received treatment for cancer. Under California law, medical marijuana was legal, meaning state authorities would not punish her for growing and using the drug. However, according to the Controlled Substances Act of 1970 (CSA), passed by the national government, marijuana was illegal to possess or use in any circumstance.

Federal government authorities arrested Raich for growing marijuana plants in her home, and she subsequently contested the arrest. Her attorneys did not dispute the federal government's authority to regulate drugs under the interstate commerce clause. Yet, the marijuana grown by Angel Raich was cultivated and used only in California, meaning it was intrastate commerce, and the federal government had no right to regulate its use.

The question presented before the Supreme Court was this:

• Did the Controlled Substances Act exceed Congress' power under the commerce clause as applied to the intrastate cultivation and possession of marijuana for medical use?

The answer the Supreme Court provided stretched the commerce clause a great deal. The Court decided the federal government did hold the authority to regulate the drug trade because it did classify as interstate commerce, even in Raich's situation. The Court expounded on their ruling, by stating the marijuana grown and consumed by Raich was indeed cultivated within the state of California, but it affected the markets of interstate drug activity, which meant that her drug use could also be regulated.

Can you answer: Precisely how far should the federal government be permitted to stretch the commerce clause?

Though the commerce clause permits a great deal of flexibility for the national government to make laws about many topics, it is not limitless power. A recent example of this stems from the controversial legislation known as the Affordable Care Act (ACA) passed in the first term of President Barack Obama's administration.

The most controversial part of the ACA was the requirement that all citizens have health insurance. This individual mandate in the ACA was challenged in the federal court system as being unconstitutional because the federal government had no authority to create a law about healthcare, particularly requiring individual citizens to purchase a product. If citizens do not have health insurance, they would be forced to pay a financial penalty. The federal government countered that both the commerce clause and the elastic clause gave them the power to create such a law.

The Supreme Court held in National Federation of Independent Business v. Sebelius (2012) that the individual mandate in the ACA did not violate the Constitution, but for different legal reasons than the federal government had expressed. According to the opinion of the Court, the federal government had the power to impose an individual mandate not because of the commerce clause or the elastic clause, but due to the federal government's power to tax.

The decision upheld the ACA and the individual mandate, but also sent a signal to the federal government that the commerce clause has limits.

Interstate Issues

The relationship between the federal government and the states remains tenuous, as do the relationships between the individual states themselves. We discussed in the previous chapter the need for Article IV in the Constitution, which assists in governing the relationships between the many states, requiring they honor the various decisions and documentations of one another. The issue of marriage certificates has become a controversial issue within the past two decades because of the legalization of same-sex marriages in certain states.

Must all states honor same-sex marriages though they do not issue them within their own state? The Supreme Court heard a challenge to the Defense of Marriage Act (DOMA) in 2013 when Edith Windsor filed a challenge to its constitutionality. Windsor was legally married to a woman in Canada, which was recognized by the state of New York. However, because of DOMA, the federal government did not recognize the marriage as legal.

When Windsor's partner died, she was not considered a spouse by the federal government, and was forced to pay an inheritance tax of $363,000. Had the federal government recognized her marriage, she would not have had to pay the tax. Windsor filed suit in federal court, claiming her rights to Equal Protection under the law (per the 5th Amendment) were violated. The logic behind Windsor's argument was that a legally recognized marriage in the state of New York should also be recognized by the federal government, as was the case for heterosexual marriages.

The key question addressed in United States v. Windsor (2013):

• Does DOMA, which defines the term “marriage” under federal law as a “legal union between one man and one woman” deprive same-sex couples who are legally married under state laws of their Fifth Amendment rights to equal protection under federal law?

The Court said, yes, DOMA's definition of marriage does violate the Constitution. However, the Court did not completely overturn the entire Defense of Marriage Act. The justices ruled the federal government only had to recognize same-sex marriages in states where it was legally permissible. Thus, the federal government would recognize all same-sex marriages is New York for purpose of tax benefits, inheritance rights, and other spousal privileges. But, in states such as West Virginia, where same-sex marriages were not legally permissible, the federal government would not have to recognized same-sex marriages. The Court was basically saying that the federal government had to match the practices instituted by each state, whatever they may be.

This decision was followed up with Obergefell v. Hodges (2015) where the Court ruled states could not deny same-sex couples the right to marry, thus nullifying the remaining portions of DOMA.  

When states have controversies they do not wish to be settled by the courts, they may work out their own compromise by way of an interstate compact, which is an agreed upon solution by two or more states that must be approved by Congress. One notable example of this process is the New York-New Jersey Port Authority. This is an agency created through an interstate compact that governs over the roads, tunnels, aviation paths, railways, and waterways that connect the two states. Both states participating in the costs, benefits, and administration of the agency.

The power of the Federal Government over the States

Though state governments have a great deal of power to create and administer laws within their borders, it is important to remember they are subordinate to the national government. The first major instance of conflict between the states and the national government resulted in a dispute over the chartering of the Second National Bank of the United States. States in the union believed a national bank would take away from the business of their state chartered banks. Also, states didn't believe the national government had the authority to establish a national bank because such a power was not listed in the Constitution.

The state of Maryland attempted to interfere with the success of the branch of the national bank that was created within their borders. They created a law requiring a tax on any banks not chartered by the state of Maryland. The national bank's branch manager, James McCulloch, refused to pay the $15,000 tax levied by the state. Maryland officials took McCulloch to court over his refusal to pay the tax.

In McCulloch v. Maryland (1819), the Supreme Court had two questions to answer:

• Did the federal government have the authority to create a national bank?
• Was Maryland's tax on the national bank legitimate?

Chief Justice John Marshall and the Court's decision stated the national government did hold the power to create a national bank because of the necessary and proper clause. According to the Court, the ability to create the bank could be implied from the enumerated powers listed in the Constitution.

The second question saw Marshall expound on the issue of taxation, writing, "... the power to tax involved the power to destroy," and if the states had the ability to tax the federal government, then the Supremacy Clause would be meaningless.

This case, along with several others during Marshall's tenure as Chief Justice, created the standard whereby the national government was superior to the states.

Mechanisms that allow the federal control of the states

Over the last 200 years, the federal government has taken advantage of the Supremacy Clause and developed ways of manipulating states into compliance with federal goals. One of the most significant methods of federal control over states is via grants (often referred to as grants-in-aid). Grants are money given by the federal government to the states. Last year, more than $600 billion was handed out to states in the form of grant money.

Why does the government give money to the states? The federal government has no obligation under the Constitution or law to hand out grant money. Why bother? Several reasons!

Dolla' billz, y'all ...

First, issuing of grants to the states is a method of control. While a grant is a sum of money that does not have to be paid back, there are often conditions that must be met to receive that money.

Grants are also a means of having states carry out goals, implement policies, and take care of other small tasks the federal government is too busy to do. The federal government has serious tasks such as national defense to tend to, so it's much easier to simply give the states the money to fix a smaller issue, such as paving roads.

Money given to states also provides a means of equalizing resources between larger and smaller states. For example, California's population of over 40 million provide a larger tax base than Montana, which has less than 500,000 residents.

One type of grant available to states is called the categorical / formula grant. When the federal government wants a specific task completed, they can write the grant in such a way that the criteria for receiving the grant is so specific, it can typically only be used for one purpose. If the federal government wants to devote more resources to young children who struggle with reading, they might write a specific grant for books and computer software specifically for special education classes at the elementary level. If a state's schools are doing well, they might not have much use for this grant, nor could they qualify.

Another type of grant available to states is referred to as a block grant. These types of grants are typically for very broad purposes with few conditions attached. A popular example of a block grant program is Medicaid, which provides health insurance for Americans following below a certain income level. Medicaid is funded through a block grant to states, where each state has the ability to run its own program, provided they meet a few broad requirements.

Can you answer: do states prefer block or categorical/formula grants? Why?

The federal government also funds specific projects throughout the country that they believe can benefit Americans. These project grants go to specific individuals or small groups, who use the funding to carry out research or other significant work. Typically, these project grants work one of two ways. In one capacity, the government has a list of projects they want to see completed and people apply to take on those jobs. The other method is when an individual drafts his or her own project and presents it for considering for funding.

Project grants exist in practically any policy area you can think of. Medical doctors using money for finding cures to diseases, researchers preserving and restoring buildings of historic value, or farmers attempting to find better ways to grow crops. These sort of activities help the nation as a whole, and the government has an interest in creating a better way of life for Americans.

The national government also exerts its authority over the states through federal mandates. Mandates are requirements from the federal government with which the states must comply or consequences result. Mandates typically come in the form of a legislation or law and have four main types.

The first type of mandate, and the most frequently used, is a direct order. This is when the federal government passes a law requiring states to take certain actions and refusal to comply can mean civil or criminal penalties (fines or jail time). Perhaps the most notable direct order in recent history came through the Americans with Disabilities Act of 1990 (ADA). This law required public accommodations to be made handicap accessible and required that employers not discriminate against a physically disabled person in hiring practices, provided the person was capable of performing the job otherwise.

Having businesses implement fair hiring practices was not overly difficult for states to implement, however, having all public accommodations be made handicap accessible was a more difficult task. All street corners needed to have small ramps or be pitched, public buildings needed automatic doors, all government buildings such as schools needed elevators to be installed, etc. to allow for wheelchair access. The main problem for states and cities was they lacked the funding to make these changes and the federal government did not provide any money for the task.

This presents the biggest problem with most mandates: they often go unfunded. It's not that states didn't think the ADA was a good or fair law, they simply did not have the money to do what the federal government was requiring. Thus, many cities went decades without making these changes required by federal law.

Mandates can also come in the form of cross-cutting requirements. These establish certain conditions that extend to all activities supported by federal funds, regardless of their source. The first and most famous of these involves the Civil Rights Act of 1964, which holds that in the use of federal funds, no person may be discriminated against on the basis of race, color, or ethnicity. Any entity receiving government funding who violates these requirements jeopardizes the continued flow of grant money to their state.

The federal government can also control states through crossover sanctions, where penalties are levied against states when they refuse to comply with policies where the penalty isn't directly related to the policy (hence the term crossover). The federal government withholds highway funding from states if the states do not requiring their drinking age to be 21.

Finally, mandates sometimes will use total or partial preemption. Because of the Supremacy Clause in the Constitution, the federal government will purposely threaten to create laws that would conflict with state laws. In such a case, the federal law would trump the state law.

Key Legislation and Cases Pertaining to Federalism

There are many other pieces of legislation and court cases that are significant in helping to define the relationship between the national government and the states. One of the more controversial pieces of legislation during the Bush administration is the No Child Left Behind Act of 2001 (NCLB). This law greatly reformed education with the concept of requiring more accountability from teachers and administrators. The law required (among other things):

• Teachers to be "highly qualified" (with each state determining their own definition of that)
• Any school receiving Title I funds to make "adequate yearly progress" (AYP)
• Some form of standardized testing as a form of benchmark
• Corrective actions for schools who did not meet AYP
• Common objective standards for students to meet within that state

Despite the good intention of the laws, NCLB has been criticized for many reasons. Many have questioned whether the federal government had the power to enact such a law, considering education is not mentioned in the Constitution and has traditionally been in the realm of power of the states. Also, NCLB represents a classic example of a poorly funded mandate. The federal government required a great deal of changes to education systems but did not provide nearly enough money to implement the changes it demanded.

One key policy area that is often misunderstood is that of welfare. Radical change occurred under the Clinton administration with the Welfare Reform Act of 1996. This law provided states with annual block grants to provide welfare assistance to their citizens with only a few requirements. The requirements levied by the national government were that citizens couldn't receive more than two consecutive years of welfare benefits and no more than five years of total assistance from federal dollars (if states used their own funding, that was at their discretion). This law also ended welfare as an entitlement program (which separated it from programs like Social Security, Medicare, and Medicaid).

Welfare reform was also significant in the relationship between the national government and the states because it sent power back to the states. They were given the autonomy to create a welfare assistance program that fit the needs of their citizens and that was no longer in the hands of the national government.

One significant victory for states in controlling the power of the federal government came in the 19th century in the case, Barron v. Baltimore (1833). John Barron, a businessman in the city of Baltimore, owned and operated a wharf where ships would dock and unload cargo. As the city of Baltimore was growing, they dumped dirt and other debris into the harbor waters where Barron's dock was locating. The accumulation of the debris made the water so shallow that ships could no longer safely dock.

Barron sued the city of Baltimore, claiming they owed him compensation under the Fifth Amendment of the U.S. Constitution, which reads, "... nor shall private property be taken for public use, without just compensation." Barron's argument seemed legitimate.

This case represented another instance where John Marshall set another judicial trend. Marshall wrote for a unanimous Court when he determined that Barron had no legitimate claim against the city of Baltimore because the Fifth Amendment of the U.S. Constitution (and any other amendment) only provided protection from the national government. It did not guarantee protection from state governments. The only protections Barron had in his case against Baltimore were the ones found within the Maryland State Constitution.

The Future of Federalism

The last few years has seen a growth in the number of Americans who support returning more power to the states in what would more closely resemble the dual federalism of the early 19th century. However, the argument over the strength of the federal government appears to be based on partisanship. The Republican Party has been critical of the role of the federal government, claiming that "big government" causes more problems than it solves. From their perspective, the federal government's role should be limited to maintaining law and order while ensuring national defense.

The Democratic Party believes that a larger, stronger federal government is a necessity in addressing the needs of citizens. The perspective here is that part of the responsibility of the government is to not only maintain defense and a peaceful nation, but to generate a sustained standard of living for all Americans.