Consider the vignette that opened this chapter.
which has resulted in ambiguity about where national power and authority end and state power and authority begin, and vice versa. Figure 3.1 illustrates how state and national governments both have their own powers but also share the authority to perform some of the same functions. In other words, the Constitution has a built-in tension between the national government and the states. That tension has long been part of the American experience, and it continues to be the source of political conflict.
The U.S. Constitution sets up a system where national power is shared with state governments. This is called a federal system. The national government is part of a federal system. When addressing the national government, one is referring specifically to the highest level of government in a federal system. At the same time, the phrase “federal government” is used interchangeably with “national government” when referring to the highest level of government in a federal system. The two principal bases for national power are found in the Commerce Clause and the Supremacy Clause of the Constitution. The Commerce Clause, found in Article I, Section 8, gives Congress the power to “regulate Commerce with Foreign Nations, and among the several states,” which allows the national government to regulate various activities related to interstate commerce. For example, the national government may create environmental regulations because pollution crosses state lines.
The Supremacy Clause gives the Constitution and national laws authority over the states:
This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to be Contrary notwithstanding.
The Supremacy Clause addresses those times when state or local laws conflict with national laws or the U.S. Constitution. In these instances, the Constitution and the national laws prevail.
The 10th Amendment states that all powers not delegated, or specifically given, to the federal government become powers held by the states. Put differently, if the authority to do something is not expressly given to the national government, that power falls to the states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” Fittingly, this is known as the “reserved powers” clause. In contrast, federal powers are listed, or enumerated, in Article I, Section 8 of the U.S. Constitution. Many argue that these powers may be interpreted in a way that expands them beyond those listed in Article I, Section 8 through the Necessary and Proper Clause found at the end of Article I, Section 9. This means that state powers may be limited by the national government even if those federal powers are not enumerated in Article I, Section 8.
The 10th Amendment, put differently, says that if the authority to do something is not expressly given to the national government, that power falls to the states.
As we have seen, the defining feature of the American federal system is that states share power and authority with the national government. In fact, the Bill of Rights was intended to protect the civil liberties of the people and state sovereignty by imposing limitations on national authority. However, in 1925, the U.S. Supreme Court began applying key provisions of the 14th Amendment to the states and interpreting some state laws to be in violation of the Bill of Rights. These interpretations have expanded the power of the national government while limiting state power.
Federal–state relations often hinge on the tension between these national and state bases of power. Consider the national No Child Left Behind Act (2001). In an effort to improve students’ educational outcomes, this law limits states in how they regulate education, assess student learning, and respond to student learning gains among other concerns, even though public education has been provided and regulated by the states for more than 200 years. Regulating education has long been considered to be a reserved power under the 10th Amendment: Absent provisions that both grant express (or enumerated) powers to Congress and withhold them from the states, the 10th Amendment means that it is assumed that the states are given those powers unless those powers are given specifically to Congress.
State Sovereignty Versus National Unity
What are the limits of states’ rights? The answer is not clear, as the Supremacy Clause, the 10th Amendment, and the 14th Amendment all speak to national and state power. When a state’s interest interferes with a national interest, there are limits placed on state power. The language of the 10th Amendment appears to limit national authority unless that national authority is spelled out in the Constitution. According to this view, if the states are sovereign, there can be no national authority that interferes with that sovereignty. And yet, if there is no national authority to limit state sovereignty, then the United States cannot be a united nation.
Recall from the discussion in Chapter 2 that there was great concern among states’ rights advocates that the states might lose their sovereignty to the national government following constitutional ratification. This was apparent with the issue of representation and the division between free states and slave states when the Constitution was being designed. James Madison proposed that the Three-Fifths Clause be included in the Constitution to calm fears that Southern states would become more powerful than others when counting slaves as whole persons for the purposes of representation. Slave states were concerned that as more territories were admitted to the union as free states, power among slave states would become diluted. Beyond that concern, if the number of free states admitted to the union were to far outnumber slave states, then the free states might support a constitutional amendment outlawing slavery.
John C. Calhoun (1782–1850), a South Carolina statesman, wrote a famous pamphlet titled A Disquisition on Government, which was published shortly after his death. Calhoun expressed concern that over time the Southern states would be outnumbered. To preserve state sovereignty, he proposed two mechanisms to assert states’ rights: nullification and interposition. Both mechanisms would allow a state to effectively decide that a federal action does not apply to it.
Nullification would grant veto power to each state, similar to that held by the president. Calhoun suggested that for a bill to become law, a majority of each state legislature, in addition to a majority of both houses of Congress, would have to pass it. In other words, if the legislature of just one state voted against the measure, it would not become law.
Nullification would also allow any state to veto anti-slavery legislation. For example, the states would be able to veto the Missouri Compromise (1820), which allowed territories above the 368 30’ north parallel to be admitted as free states and those below it to be admitted as slave states.
Given that each state has different interests and priorities, the likely consequence of nullification would be to effectively paralyze and limit the authority of the national government. Nullification would make the national government under the U.S. Constitution no more powerful than it was under the Articles of Confederation.
Interposition was a less drastic proposal, but it too would have meant a weakened federal system. With interposition, a state would have the right to oppose federal actions that it considered unconstitutional. Interposition would allow a state to assert its sovereignty by placing a barrier between itself and the national government and deciding that a national law passed by both houses of Congress and signed by the president does not apply within that state’s borders. The state would, in effect, exempt itself from following that national law. Interposition would have allowed free states admitted above the 368 30’ north parallel to declare that the prohibition of slavery did not apply to them.
Neither nullification nor interposition ever took firm root, although the fact that the two ideas were even suggested demonstrates the tensions organized around state and national sovereignty. Calhoun’s argument highlights the tensions built into the U.S. Constitution.
3.2 Understanding Federalism
The last chapter outlined how separation of powers serves as the cornerstone of the U.S. Constitution. Federalism is another cornerstone. As suggested by its preamble, which begins with “We the People,” the Constitution declares that sovereignty, or the ultimate authority to govern, rests with the people. Through the Constitution, the people distribute their sovereignty to the units of government (national and state) in a federal system.
The concept of federalism can be interpreted in multiple ways. For example, federalism might suggest that the national government has supreme and equal authority over all 50 states. Alternatively, federalism can mean that the national government and states enjoy equal sovereignty. The second interpretation was the dominant approach taken in the United States from the Constitutional Convention up until the 1930s. During this period, the national government could not tell the states what to do, nor could the national government dominate the states. Rather, the states and the national government cooperated. Beginning in the 1930s, the federal government became more involved in domestic policy functions, and federalism came to be understood as a relationship where the states were subordinate to the supreme power and authority of the national government. This understanding, however, is not absolute; rather, federalism should be viewed on a scale where strict states’ rights are found on one end while absolute national authority is found on the other end. Depending on the public’s needs, a pendulum swings back and forth between the two ends of the scale.
By establishing a federal system, the Framers rejected the concentration of power and authority in the hands of a central government.
The Framers’ Vision
The idea of coequal state and national sovereignty lies at the core of the American constitutional system. Recall from Chapter 2 that the Constitution is a contract between the states and the national government. The 13 original states agreed to enter into that contract with the understanding that they would not surrender their sovereignty. The phrase “We the People,” which establishes the principle of popular sovereignty, also refers to the people of the original 13 states coming together, thus maintaining the concept of state sovereignty. Providing a common defense, as noted in the Preamble, required state governments to give up their power to a strong national government.
The Framers believed that a federal system would secure individual liberties. The division of power between a sovereign national government and individual sovereign states would distribute power while the separation of powers among three branches of government would ensure that citizen rights and liberties would not be easily violated. By establishing a federal system, the Framers rejected the concentration of power and authority in the hands of a central government. Each phase of federalism is discussed in detail later in this chapter.
Contemporary Federalism as Intergovernmental Relations (IGR)
If the Framers were alive today, they might not recognize the federal system, because they conceived of it as a formal division of power and authority between the states and the national government. Today, federalism is thought of less in terms of formal divisions and more in terms of working partnerships between the states and the national government. In fact, when we talk about federalism today, we talk in terms of intergovernmental relations (IGR), whereby the states and the national government must work together to achieve a common public purpose.
The working relationship is not always easy or smooth. The tension between state and national sovereignty continues, although states must work with the national government in order to fulfill citizen needs. Unless it is part of its enumerated constitutional powers found in Article I, Section 8, the national government should not direct state actions. The national government lacks authority other than to use the power of the purse to enforce compliance. Consider the vignette that opened this chapter. The federal government is obligated to enforce immigration policy by patrolling the borders.
Despite the built-in tension, the national government has several tools at its disposal to help ensure cooperation from the states. One tool is grant-in-aid, or sums of money the national government gives to the state or local governments to do something. If the national government gives the state of Colorado money to repair highways, for instance, that money is usually considered to be a grant-in-aid. Not all grants-in-aid are the same. There are two basic types: categorical grants and block grants.
A categorical grant is money given to a state by the federal government for a specific purpose or function, such as to build or repair roads. Categorical grants allow no flexibility or discretion. Through categorical grants, the federal government is able to wield influence over both states and localities. By contrast, block grants offer states more flexibility than categorical grants do. Whereas the categorical grant is single purpose, the block grant is multipurpose. A block grant is actually a group of several categorical grants that are related to one another. Within the block are several separate programs, and the recipient of the grant can choose which programs to fund and can move money around from one program to another.
The national government can seek state compliance through the courts. A court that issues a judgment against a state has no real enforcement power, although states may comply with judgments against them if only because they have been ruled against. At the same time, the national government may utilize preemption, which is the federal government’s right to prevent state and local governments from enforcing their own laws because those state and local laws conflict with the Supremacy Clause. Either scenario is less likely today than it was in the early republic. A tradition of respecting and abiding by judgments of courts has evolved over time.
In 1957, President Eisenhower used federalized troops to force the Little Rock, Arkansas, schools to comply with the Supreme Court’s ruling in Brown v. Board of Education. Here, the troops are moving protestors away from the high school.
Use of Federal Marshals
The national government may, though not frequently, use troops as a last resort to enforce court decisions against state governments. As an example, the Supreme Court held in Brown v. Board of Education (1954) that Kansas’ racial segregation of the schools violated 14th Amendment equal protection guarantees and was therefore unconstitutional. A year later, the Court ruled that schools nationwide would have to integrate, which meant that there could no longer be separate schools for White and Black students.
Many states, particularly in the South, refused to comply with these Supreme Court rulings. One conflict came to a head in 1957 in Little Rock, Arkansas. Arkansas Governor Orval Faubus refused to comply with the U.S. Supreme Court’s 1954 decision in Brown v. Board of Education mandating school desegregation in Little Rock. Instead, he had the Arkansas National Guard block nine Black students from entering a local Little Rock high school. President Dwight D. Eisenhower “federalized” the Arkansas National Guard, which in effect shifted their command from the governor to the president. President Eisenhower then ordered the Arkansas National Guard to escort and protect the nine Black students integrating Central High School. Such events can add tension to the federal–state relationship.
3.3 Historical Phases of Federalism
Like the U.S. Constitution and core American values, approaches to federalism have changed over time. From the Dual Federalism (1789 to the 1930s) period through the Cooperative Federalism (1930s to 1960s) period (which included Creative Federalism [mid-1960s]), the balance of power shifted from the states to the national government. New Federalism is characterized by an attempt to rebalance the distribution of power between the states and the federal government in the 1970s and 1980s.
Dual Federalism, 1789–1933
Dual Federalism dominated between the time of the ratification of the Constitution and 1933, when the national government became more active during the time of the New Deal, a legislative package intended to help Americans suffering during the Great Depression. During the Dual Federalism period, there was a division of labor between the states and the national government. While the national government was responsible for national concerns such as securing borders, defending the nation, and maintaining foreign policy and mail delivery, states were responsible for local law enforcement, education, and maintaining roads and waterways.
Cooperative Federalism, 1933–1960s
As the national government assumed more responsibility for domestic policy during the Great Depression, the states were responsible for implementation. This Cooperative Federalism phase involved the states and the national government working together to implement public policy, which brought the era of intergovernmental relations.
As an example, when Social Security was enacted in 1935, it created a retirement program for senior citizens and public assistance for the poor originally called Aid to Dependent Children (ADC) (and in the 1960s came to be known as Aid to Families with Dependent Children [AFDC]). The national government created guidelines for implementing ADC and funded it while the states implemented it. States could determine who would be eligible to receive assistance and how much they would receive based on national criteria.
In the Dual Federalism period, the states and the national government operated separately, while under Cooperative Federalism the states and the national government worked together. Americans now looked to the national government for solutions to their problems largely because the states did not have the resources to address them, although the states also looked to the national government to address their concerns. One result was that the states lost power under Cooperative Federalism.
Creative Federalism, 1963–1969
Creative Federalism began in 1963 with the Johnson administration. Creative Federalism represented a shift of power from the states to the federal government through use of grants-in-aid and increased regulation. The national government sought to create new programs through numerous grants-in-aid programs to both states and localities under Creative Federalism.
But Creative Federalism also used crossover sanctions to achieve state compliance. A crossover sanction occurs when the national government withholds funding in one program area to ensure compliance in other areas. As an example, when Congress passed the Voting Rights Act in 1965 and prohibited racial discrimination in allowing people to vote, many states chose not to enforce it. Using the crossover sanction, the national government threatened to withhold promised subsidies, such as funding for highway repairs, for states that failed to enforce the act. Subsidies refer to special assistance from the government for a program or project, such as a social program. Initially, there were some strongly segregationist states that were adamantly opposed to allowing African Americans to vote and were thus willing to forfeit highway subsidies. Arguably, the national government could have sent in federal marshals to protect voting rights, but doing so would have heightened the tension between the national government and the states. Crossover sanctions persuaded Southern states to comply with the Voting Rights Act.
New Federalism I, 1972–1980
President Richard M. Nixon introduced New Federalism. In it, cities applying for federal categorical grants receive monies in a lump sum to allocate to their communities as they see fit.
In response to the growth in grants-in-aid, the Nixon administration introduced New Federalism, which was intended to restore the traditional balance between the states and the national government. The real objective was to cut many of the social programs that had been connected to President Johnson’s domestic policy and anti-poverty programs enacted during the 1960s under Creative Federalism.
Initially, the Nixon administration sought to combine categorical grants into block grants. But Nixon’s New Federalism introduced general revenue sharing, which involves the national government giving money to the states without restrictions on how those monies would be spent. Nixon reasoned that this approach would be politically feasible as, instead of cities applying directly to the national government for categorical grants, they could get lump sums to use for themselves. Suburban areas often received more money than central cities did.
New Federalism II, 1982–Present
Although states had more discretion under the New Federalism/general revenue sharing arrangement, the balance of power favored the national government. Governors complained that the traditional balance of power between the states and the national government was distorted because the states were limited in determining their spending priorities.
The Reagan administration (1981–1989) promised to end the big government era and restore the balance of power between the states and the national government. As with Nixon before him, Reagan confronted Democratic majorities in Congress who resisted cutting social programs. The means to reform this system came to be known as New Federalism II, which featured the Great Swap and the Super Trust Fund.
The Great Swap, as proposed, involved the national government trading responsibilities with the states. The national government would maintain responsibility for Medicare (health insurance for the elderly), while states would have responsibility for Medicaid (health insurance for the poor and people with certain disabilities). Until this point, Medicaid was jointly funded by both the national government and the states.
Further, the national government would provide temporary funding for the states’ new responsibilities through a Super Trust Fund, which would be established for almost $30 billion and expire after 4 years. After the funds ran out, states could either discontinue their programs or manage them with state funds.
Reagan reasoned that without national funding, governors would have no choice but to cut Medicaid and other state social programs. Governors initially liked the idea because they would have full discretion over their programs and budgets.
New Federalism II, however, never really emerged as New Federalism I did. States did assume responsibility for Medicaid while the national government maintained responsibility for Medicare. A trust fund was set up, but it was not easily phased out because a big recession set in during the early 1980s and the governors resisted losing federal funds. The states became increasingly dependent on the national government for support, as they could not meet the needs of the people. Figure 3.2 illustrates the rising costs of Medicaid for the federal and state government.
Arguably, New Federalism paved the way to the era of unfunded mandates. An unfunded mandate works similarly to Creative Federalism as, with unfunded mandates, the federal government does not provide the states with needed funding, which forces the states to pay for nationally mandated programs on their own.
As an example, each state provides unemployment benefits that its finances with its respective state unemployment insurance trust funds, into which employers have paid premiums. Most states provide unemployment benefits for 26 weeks, although during severe recessions the federal government may extend benefits for 13 weeks or more. When Congress votes to extend unemployment benefits, it appropriates money for the additional coverage, but not enough to cover the entire cost. The portion that is left to the states to pay is an unfunded mandate.
Congress passed the Unfunded Mandates Reform Act of 1995, which was intended to limit the number of unfunded mandates imposed upon the states. Under the law, mandates could not be imposed unless federal funding was included in the mandate to help state and local governments fulfill mandate requirements.
Consider the vignette that opened this chapter.