Chapter 3: Federalism

Introduction The most widespread cause of political conflict is national-state government relations, either in terms of different states wanting different things (ex. Slavery) or in terms of national interests vs. state rights (ex. Regulation of business, social welfare) In the 1990s and 2000s, there was/is a trend towards scaling back national government activities and giving them to the states (devolution), often accomplished through the national government giving block grants (money designated for use in certain broad areas) to the states, as enacted by the 1994-96 104th Congress Federalism is a political system with local units of government, as well as a national government, that can make at least some decisions on their own and whose existence is specially protected (ex. In the US, Canada, Australia, India, Germany, and Switzerland) In a unitary system, local governments may be edited or deleted by the national government, and do not have final authority over governmental activities (ex. In France, Great Britain, Italy, and Sweden) In a confederation, the states are sovereign delegate powers to the national government In the US, the independence of the sub-national governments from the national is largely caused by the American idea of self-government and the fact that local constituencies elect and influence Congresspeople Much of the national government's work consists of getting the states to run their programs (ex. Welfare, highways, city improvement, water treatment) in accordance with national goals

Governmental Structure

Federalism: Good or Pros: Bad? A small group of people can stop legislation that would be detrimental to those in their locale It is easier for one political group to dominate a smaller political unit Cons: The sub-national governments would be able to make (or obstruct) decisions to prevent progress, protect special interests, and foster corruption It is easier for one political group to dominate a smaller political unit Increased Political Activity The most obvious effect of federalism is increased political activity and mobilization, because people see that they have a greater chance of having a practical effect when there are many elected officials and governing bodies with smaller constituencies Federalism lowers the cost of organized political activity by decentralizing authority Much of the details of the federal system were not established by the Founders, but by worked out by conflict and settlement The Founders instated federalism to protect personal liberty, and because the confederation established by the Articles was failing because the states were not cooperating In Federalist No. 46, Madison explained that the state and federal governments are

The Founding

A Bold, New Plan

different agents and trustees of the people, constituted with different powers In Federalist No. 28, Hamilton explained that the people could vary their support of state and/or federal governments to keep them in balance, and use the other to defend himself should one infringe upon his rights At the time, the plan for federalism was unprecedented, and its implications not fully understood, ex. The Tenth Amendment that reserved for the states powers not delegated to the national government was added as an afterthought The Supreme Court has often interpreted the 10th Amendment to allow the national government powers not explicitly delegated to it Elastic Language Many clauses in the Constitution were vague on what powers go to which levels of government; it would have been impossible for the Founders to spell out exactly what the state-national relationship ought to be, and circumstances change So elastic language was written into Article I giving Congress the power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers The Founders had different views on what federalism entailed: Hamilton and others felt that the national government was superior to the states', and that its powers should be defined broadly and liberally, because the people had created the national government, the laws made in accordance with the Constitution were the supreme law of the land, and because national concerns were the most pressing Jefferson and others felt that the national government's powers should be few and limited, because the national government was a product of an agreement between the states and because it would be the most likely threat to people's liberties The Civil War settled part of the debate over national supremacy vs. states' rights: states could not lawfully secede because the national government was supreme with its sovereignty derived from the people During the formative years of the country, the head of the Supreme Court, the arbiter of the Constitution, was Chief Justice John Marshall, who sided with the national supremacists 1819 McCulloch v. Maryland: James McCulloch was a cashier at a MD branch of the Bank of the United States who refused to pay a tax levied on the bank by the state of MD, and who was convicted in a MD state court of failing to pay a tax But the Supreme Court unanimously overturned it and established that: The federal government's powers are only those listed in the Constitution, but the extent of those powers can be interpreted to allow actions consistent with the letter and spirit of the Constitution (ex. The federal government may set up a bank or other corporation, despite the power not being mentioned in the Constitution, because the Constitution gives it the power to manage money) A state may not tax a federal instrument, because then it would put itself in a superior position 1870s the Supreme Court decided that the federal government could not tax interest on state and municipal bonds, just as states couldn't tax federal bonds, but 1988 the Supreme Court reversed its decision, so that the only thing keeping the federal government from

The Debate on the Meaning of Federalism

The Supreme Court Speaks

taxing them was politics (so far, it has not taxed them) Nullification Though the Supreme Court may decide a case, the issue still may not be settled, ex. The case of nullification 1798 in reaction to laws passed by the federal government that punished newspaper editors who published stories criticizing the federal government, James Madison and Thomas Jefferson argued in the Virginia and Kentucky Resolutions that states had the right to nullify federal laws that the state felt violated the Constitution Before the courts could settle the issue, the laws in question expired In the antebellum period, the issue of nullification was brought up again by John C. Calhoun of SC, who argued that states could nullify a federal ban on slavery After the Civil War, the doctrine of dual federalism emerged that said that the federal and state governments were both supreme in their separate spheres, ex. States regulate intrastate commerce while Congress regulates inter-state commerce At first, the distinction between the two kinds of commerce was product-based; interstate shipments of lottery tickets, prostitutes, alcohol, and harmful food and drugs was regulated by Congress, while manufacturing, insurance, and farming were regulated by the state because there were traditionally considered intra-state Problems: When does a product shipped between states exit inter-state commerce and enter intrastate commerce? At first, the Supreme Court decided commerce was inter-state as long as the product was in its original package, but what of things that are not shipped in packages? How to distinguish between manufacturing and transportation if one company owns factories in different states, or if one company performs both actions? What if= an insurance company sells policies to people both in- and out-of-state? Should there be different laws regulating identical policies? Eventually, by the 1940s, the Supreme Court had allowed the federal government to regulate anything that affected the stream of commerce flowing through the country So janitors in buildings that house inter-state businesses, lawyers, and marijuana are part inter-state commerce, while professional baseball players are part of intra-state commerce Dual federalism isn't dead: 1995 United States v. Lopez in which the Court determined that Congress had overstepped its bounds by prohibiting guns in a school zone May 2000 in United States v. Morrison the Court (under Chief Justice William Rehnquist) overturned, in a 5/4 decision, the 1994 Violence Against Women Act, which allowed female victims of gender-motivated crimes to sue the perpetrator in a federal court, because attacks against women do not substantially affect inter-state commerce 1997 in Printz v. United States (another 5/4 decision) the Court declared invalid a federal law requiring local police to background-check all who purchase guns, because it required state governments to carry out the federal program, thus violating the 10th Amendment Decisions expanding upon the 11th Amendment, which protects states from lawsuits by

Dual Federalism (and Inter-state and Intra-state Commerce)

State Sovereignty

citizens of other states or nations: 1999 ruled that copyright owners claiming infringement by state agencies and people who believed state regulations created unfair economic competition could not file lawsuits against states 1999 in Alden v. Maine ruled 5/4 that state employees could not sue states for noncompliance with federal fair-labor laws, because federalism requires that Congress treat the states [] as joint participants in the governance of the nation 2002 in Federal Maritime Commission v. South Carolina Ports Authority expanded 5/4 states' sovereign immunity from private lawsuits However, 1999 ruled 7/2 that state welfare programs may not restrict new residents to the benefit they would have received from their old state Generally, ruled that Congress can make federal laws on whatever as long as it does not commandeer state resources or violate state rights Generally, states can do whatever not prohibited by the Constitution, federal policy, or the state constitution, ex. Police power is laws and regulations that promote health, safety, and morality, ex. Criminal codes, requiring school attendance and vaccinations, restricting availability of porn State constitutions are often much more detailed than the federal one, ex. CA's explicit right to privacy, that non-citizens and citizens have the same property rights, and governs public housing In part because of ^, state courts tend to be more progressive than federal courts, ex. On abortion rights, welfare payments, and employment discrimination Many state constitutions allow for some direct democracy: About half of them allow for initiative, with which voters can place legislation and amendments on the ballot by getting enough signatures on a petition About half allow referendum, with which voters can reject an adopted measure About 2/5 allow recall, in which voters can vote an elected official out of office if they get enough signatures on a petition The Constitution guarantees the existence of states, but state constitutions do not do the same for cities, towns, or counties and may abolish them, so there is not the same debate over the relationship of state and sub-state governments States are guaranteed two representatives in the Senate, no division without its consent, a republican form of government, and the powers not granted to Congress Federal-State Relations Though the federal government is supreme constitutionally, it cannot pass laws willy-nilly because politically, the laws much be approved by Congress members representing state and local constituencies Ex. 1947 Congress gave the federal government control over offshore oil, but 1953 gave it back to the states after debate Federal grants-in-aid gave states land and money to do with as they wished Started before the Constitution, with land grants for educational purposes, and continued with land grants for infrastructural projects; 1808 the first cash grants were to fund state militias But the grants-in-aid system stayed small and few until the 20th century; from 1915 to

Grants-in-aid

2003, the amount of money spent in grants-in-aid increased from $6 million per year to $400 billion per year, coming to making up 1/5 of state and local governments' budgets Reasons for dramatic increase in grants-in-aid: Grants-in-aid allowed states to run programs that Washington couldn't constitutionally run, while Washington footed the bill 1880s Washington had huge surpluses because of high tariffs 1920s the federal income tax was instated, increasing federal revenue Washington controls currency Federal money was like free money to the states because governors did not have to be responsible for raising it or managing it while being able to claim responsibility for programs funded by it If one state wants money for a particular purposes, it must support the requests of other states for similar purposes, ex. Grants after 9/11 to increase public safety that were spread around by fair-share formulas that favored less populated states and cities Meeting National Needs Until the 1960s, grants-in-aid were usually made in cooperation with the states in order to serve state and local purposes, ex. Helping farmers, building highways, supporting vocational education But during the 1960s, Washington started to make grant programs based on national needs as decided by federal officials, some of which even tried to bypass the states and provide money directly to cities or citizen groups, ex. Programs to aid the urban poor, fight crime, reduce pollution, and deal with drugs By the 1960s, some jurisdictions were completely dependent on federal money So state and local officials formed a new lobby, the intergovernmental lobby, made up of heads of jurisdictions reliant on federal funding, ex. Superintendents, governors, mayors, directors of public health, highway commissioners, police chiefs, that press for federal money and make reports to keep federals up-to-date on local issues The Big 7 of these are the U.S. Conference of Mayors, the National Governors Association, the National Association of Counties, the National League of Cities, the Council of State Governments, the International City/County Management Association, and the National Conference of State Legislatures In addition, particular states and sub-state governments often have their own offices in Washington, D.C. to lobby for money for their own jurisdictions The intergovernmental lobby was successful at getting more money with less strings attached at first, but after 1980 had spotty success To cut these strings, federal aid was shifted from categorical grants (given for a specific purpose as defined by federal law and often require states to match part of the grant) to block grants (AKA special revenue sharing, broad-based aid) and revenue sharing (AKA general revenue sharing), because categorical grants' purposes were often too narrow for a state to adapt the grants to local needs Starting mid-1960s in the health field and expanding after that, several categorical grant programs would be consolidated into one block grant designated for a general purpose with fewer strings, ex. In urban development, law enforcement, unemployment programs

The Intergovernmental Lobby

Categorical Grants Versus Revenue Sharing

 1972-86 the revenue sharing program distributed $85 billion even more string-less money to states according to wealth and tax rate for almost any governmental purpose Though states and cities gained some freedom in how to spend the money and some relief from tax burdens, block grants and revenue sharing actually failed these two goals: The money from block grants and revenue sharing grew slower than anticipated and than that of categorical grants, because Washington liked categorical grants for the control they gave over how the money was to be spent The federal government gradually added strings to the formerly unrestricted money Block grants and revenue sharing were so broad that no one interest group was vitally motivated to press for their enlargement So by the mid-1990s, categorical grants became again the most popular type of federal grant By 2004, federal efforts to decrease state and local spending combined with decreased state revenues forced many states to reduce or end programs Rivalry Among the States The shift in growth of population and business from the Northeast to the South, Southwest, and Far West has sparked debate over whether the federal government unfairly helps some regions by the way it distributes funds and awards contracts (struggle between the Snowbelt and the Sunbelt) Though it is often unclear where exactly federal money will end up going, the federal government uses formulas that take into account ex. Population, income, and housing quality to determine where money should go Thus, census results take on huge significance, because a city demonstrating declining population could lose millions in federal grants These formulas sometimes dole out money reasonably, sometimes not State and local governments, becoming more and more dependent on federal aid, began to fear that Washington would end up controlling the other levels of government (he who pays the piper calls the tune) There are two types of federal restrictions on state activities: Conditions of aid say that the state government must do something if it wants to get a grant Mandates just tell the state government what it must do, and have little to do with federal aid Most mandates deal with civil rights, ex. Anti-discrimination rules, and environmental protection Though their intent is good, some mandates cause administrative and financial problems because when they are written in vague language, federal administrative agencies can take the liberty of deciding what state and local governments should do The number of mandates has grown significantly since the 1970s Different flavors of mandates: Some regulatory statutes and amendments that elaborate on earlier legislation, ex. The 1982 Voting Rights Act Amendments that amended laws all the way from the 1960s Some are simple and straightforward, ex. 1988 Ocean Dumping Ban Act that prohibited

Federal Aid and Federal Control

Mandates

dumping municipal sewage into the oceans Some are difficult to interpret and administer and have high or uncertain costs, es. 1990 Americans with Disabilities Act (ADA) that required businesses and state and local governments to provide disabled people equal access as abled people, but there was no clear definition of what equal access meant Besides mandates, other ways that the federal governments impose costs on sub-federal governments include federal tax and regulatory policies that make it difficult for them to raise revenues, borrow, or privatize public functions, federal laws that make them financially liable, and Court decisions and administrative regulations that require or forbid them to do things by statute or implied constitutional obligation The Supreme Court has contributed to the growth of mandates by interpreting the 10th Amendment to offer state and local governments no protection against mandates, and by making decisions that place control of state and local affairs with federal judges, ex. Prison reorganization, school desegregation and busing At the same time, local citizens can use federal courts to change local practices, ex. Philadelphia's handling of police brutality and Chicago's planned location to build housing projects As of 1980, as decided by the Court, citizens may sue a local official if the official had deprived him of anything that the federal law entitles him Conditions of Aid Conditions of aid are the most important federal restrictions on state actions These conditions are voluntary in theory (reject conditions, reject money), but in reality states depend on federal grants for a quarter or more of their budgets Starting 1970s, the number of conditions has proliferated Most conditions are universally attached, ex. In order to receive federal money to build something, a state must first study the environmental impact, pay construction workers a fair wage, provide opportunities for citizen participation in designing or locating the project, and ensure that the contractors have non-discriminatory employment policies Regarding conditions of aid, federals feel that they should develop uniform national policies on important matters and prevent federal money from being badly spent, while states fell that national rules do not fit local conditions and require states to do other things that the states must pay for So, the state and local governments had discovered that the free federal money was not free, because the federal government wanted to pass laws addressing national constituencies' needs while leaving the cities and states to manage the problems In dealing with federal aid, federal and local officials often end up in a bargaining situation, because they both want the other to bear most of the costs Before the 1960s, local governments usually had the upper hand in these bargains because Congresspeople were servants of local interests; but starting in the 1960s, the federals gained the upper hand because of the weakening of the political parties, growth of publicinterest lobbies, and increased court activism 1981, during a time of prosperity, President Reagan tried to reverse the trend and consolidated 83 categorical grants into six block grants while cutting back; cities and states found that they often saved money by paying private firms to take care of some things, ex. Trash collection 1990s the economy dipped and states struggled financially, but by the mid-1990s it was

better and devolution continued A Devolution Revolution? 1994 Republican majorities were elected to both houses, so Congress renewed its effort to shift functions back to the states, ex. Devolutionizing the 1935 Aid to Families with Dependent Children (AFDC), in response to the rising number of unmarried mothers, so that there was no federal guarantee of support, states managed the program entirely, and more restrictions on who could receive aid Unlike previous devolution, this time Congress, not the president, was leading it There are three types of block grants: operational grants are for running programs, capital grants are for building things, and entitlement grants are for transferring income to individual citizens By the time of the 104th Congress, 23 block grants were in effect, and none were major entitlement grants The devolutionaries wanted to turn Medicaid and AFDC into entitlement grants, which, along with other added entitlement grants would almost double the percent of grants dedicated to income-transfer; only succeeded with AFDC and some other programs, but put the devolution of Medicaid and others on the agenda The devolution of federal programs may have triggered second- and third-order devolution of state responsibilities to local governments, and local responsibilities to nonprofits and private groups, ex. 1996-2000 many states began to administer welfare in close connection with city or county governments, and now many local governments in turn are working closely with nonprofits, religious organizations, and private groups to administer welfare 1996-2002 the number of families on welfare decreased by almost 60% (maybe because of devolution or because of the economy), so states had huge welfare surpluses of unspent welfare money, so states started to increase spending But an expansion of Medicaid, decreased revenues from tobacco-settlement payments, and increased funding towards homeland security after 9/11 caused states to struggle again financially Three main causes: Devolution supporters' mistrust of the federal government and belief that governments closer to the people were more likely to respond to popular sentiment and restrain wastefulness Devolutionists wanted to reduce deficit by cutting entitlement spending Most Americans support the theory of devolution and balancing the budget, but this support is dampened when it means fewer benefits for themselves It is difficult to tell whether devolution will gain momentum or not, it is certain the the country will not become centralized, because state and local governments retain constitutional protections, and because Congresspeople think of themselves as representatives of localities to Washington, not the other way around But Congresspeople often pass laws that cause problems for their mayors and governors because: They represent different constituencies that happen to be from the same locality

Block Grants for Entitlements

What's Driving Devolution?

Congress and Federalism

 Political parties have eroded such that most Congresspeople vote as free agents who judge local needs and national moods independently (though in some states the parties continue to be strong) When different constituencies in the same locale disagree on what their Congresspeople should vote for, it is often the best-organized special interest group (ex. Organizations of teachers or doctors) that gets what they want Americans differ greatly, depending on ex. income, race, religion, region, about which level of government they feel benefits them most In short, Americans agree on too few things to make a unitary system possible