Chapter3Federalism:ForgingaNation

Federalism:NationalandStateSovereignty
UndertheUnionoftheArticlesofConfederation,thestategovernmentsoftenignorethe
centralgovernment
Theonlyfeasiblesolutionwastogivethefederationgovernmentdirectauthorityoverthe
people
ManyAmericansidentifiedthemselvesmoretothestatesthantheUS
TheframersoftheConstitutionhadtworealities:theneedtopreservethestatesandthe
needforanationalgovernmentwithdirectauthorityoverthepeople
Sovereigntyhadbeenregardedasindivisible
Dividedsovereigntybetweenthenationalgovernmentandthestates,asystemnow
knowasfederalism
Botthenationalgovernmentandthestategovernmentsdirectlygoverntheresidents
withinitsassigned
territory
Othernationswere
governedbyaunitary
system,inwhich
sovereigntyisvested
solelyinthenational
government
Federalismisdifferent
fromaconfederacy,in
whichonlythestates
alonearesovereign
Thefederalsystem
establishedin1787dividestheresponsibilityofgovernmentbetweenthenationandthe
states

TheArgumentforFederalism
strongestargumentforfederalismwasthatitwouldcorrectthedefectsinthe
Articles:thenationalgovernmenthadneitherthepowertotaxnorthepowerto
regulatecommerceamongthestates.Thecentralgovernmentlackedthe
financialmeansformaintainanarmy
withouttheabilitytoregulate,thenationalgovernmentcouldneitherpromotethe
generaleconomynorpreventtradewarsbetweenstates
theproblemswiththetooweaknationalgovernmentweresevere:publicdisorder
,economicchaos,andaninadequatedefense
manyAmericansfearedthatastrongcentralgovernmentwouldeventually
swallowupthestates
JamesMadisonandAlexanderHamiltonarguedthatafederalsystemwould
protectlibertyandmoderatethepowerofgovernment
ProtectingLiberty

Theframersarguedthatfederalismwasapartofthesystemofchecks
andbalances
JamesMadisonarguedthatthenationalgovernmentwouldnotbea
threattolibertybecausepeoplehadastrongerallegiancetotheirstates,
whichwouldserveasabarriertofederalencroachment
ModeratingthePowerofGovernment
TheAntiFederalistsclaimedthatadistantnationalgovernmentcould
neverservethepeoplesinterestsaswellasthestatescould
Libertyandselfgovernmentwereenhancedbystatecentered
government
TheyturnedtoMontesquieu,whohadconcludedthatasmallrepublicis
morelikelythanalargeonetoservepeoplesinterests
JamesMadisonarguedthatwhetheragovernmentservesthecommon
goodisafunctionnotofitssizebutoftherangeofinterestthatshare
politicalpower
Theproblemwithasmallrepublicisthatitcanhaveadominantfaction
thatisstrongenoughtocontrolgovernmentanduseitforselfishpurpose
Alargerepublicislesslikelytohaveanallpowerfulfaction
Madisonarguesthatalargerepublicwouldmakeitdifficultforasingle
grouptogainfullcontrol,whichwouldforcegroupstoshareinthe
exerciseofpower
ThePowersoftheNationandtheStates
USConstitutionaddresses
thelawfulauthorityofthe
nationalgovernment
Authoritythatisnot
grantedtothenational
governmentisleftor
reservedtothestates
EnumeratedPowersand
theSupremacyClause
ArticleIofthe
Constitutiongrants
theCongress
seventeen
enumerated
(expressed)
powers
Establishagovernmentstrongenoughtoforgeaunionthatwassecurein
itsdefenseandstableinitseconomy
ArticleI,Section10,prohibitsthestatesfrommakingtreatieswithother
nations,raisingarmies,wagingwar,printingmoney,orenteringinto

commercialagreementswithotherstateswithouttheapprovalof
Congress
Lawfulexerciseofnationalauthoritywouldattimesconflictwiththelaws
ofthestates
ArticleVIoftheConstitutiongrantsthisdominanceinthesocalled
supremacyclause,whichprovidesthatthelawsoftheUnited
Statesshallbethesupremelawofland
ImpliedPowers:TheNecessaryandProperClause
Thegovernmenthadtobecapableofadjustingtochange
FramersincludedinArticleIoftheConstitutionthenecessaryand
properclause,orelasticclause
GivesCongressthepowertomakealllawswhichshallbenecessary
andproperforcarryingintoexecutiontheforegoingpowers
Theclausegivesthenationalgovernmentimpliedpowers:powersthat
arenotlistedintheConstitutionbutarerelatedtotheexerciseofthe
powersthatarelisted
ReservedPowers:TheStatesAuthority
Thesupremacyandnecessaryandproperclausesstoked
AntiFederalistsfearofanoverlypowerfulnationalgovernment
Theydemandedaconstitutionalamendmentthatwouldprotectstates
rightsandinterests
th
10
AmendmentoftheConstitution:Thepowersnotdelegatedtothe
UnitedStatesbytheConstitution,norprohibitedbyittotheStates,are
reservedtotheStates.
FederalisminHistoricalPerspective
Overthelongterm,theUShasundergoneaprocessofnationalizationanincreasein
nationalauthority(economicgrowthandpoliticalaction)
AnIndestructibleUnion(17891865)
ConstitutionwentintoeffectuntiltheendoftheCivilWar
TheNationalistView:McCullochv.Maryland
AlexanderHamiltonproposedthatCongressestablishanationalbank
ThomasJeffersonopposedthebankonthegroundsthatitsactivities
wouldenrichthewealthattheexpenseofordinarypeople
JeffersonsargumentfailedtoswayCongress
Congressdecidedin1816toestablishtheSecondBankoftheUS
Arylandleviedtaxesonthenationalbanksoperationswithintheir
borders,hopingtodriveouttheexistencebymakingitunprofitable
Courtruleddecisivelyinfavorofnationalbank
Agovernmentwithpowertotax,borrowmoney,andregulatecommerce
couldestablishabankinordertoexercisethosepower
MarshallprovidedtheUSgovernmentwiththelegaljustificationfor
expandingitspowerinwaysthatfosteredthedevelopmentoftheUSasa
nation

TheStatesRightsView:TheDredScottDecision
TheissueofslaveryposedagrowingthreattotheUnionssurvival
SouthernleadersdidwhatothershavedonethroughoutAmericanhistory:
theydevelopedaconstitutionalinterpretationfittedtotheirpolitical
purpose
SouthCarolinadeclaringnullandvoidanationaltarifflawthatfavored
northerninterests
PresidentAndrewJacksoncalledSouthCarolinasactionincompatible
withtheexistenceoftheUnion
ThestatebackeddownwhenCongressamendedthetariffacttosoften
itsimpactontheSouth
DredScott,aslavewhohadlivedintheNorthappliedforhisfreedom
whenhismasterdied,citingafederallawtheMissouriCompromiseof
1820thatmadeslaveryillegalinafreestateorterritory
TheSupremeCourtclamedthatslaveswerenotcitizensandtherefore
hadnorighttohavetheircaseheardinfederalcourt
TheConstitutionprohibitedCongressfrominterferingwithowners
propertyrights,Congressdidnothavethepowertooutlawslaveryinany
partoftheUS
DualFederalismandLaissezFaireCapitalism
Constitutionaldoctrineheldthatcertainpolicyareasbelongedtothe
nationalgovernmentwhereasotherpolicyareasbelongedtothe
statesdualfederalism
Raisedquestionsaboutthesuitabilityofdualfederalismasagoverning
concept
Whichlevelofgovernmentstateornationalwouldregulatebusiness?
Issueofformerslaveswouldthefederalgovernmentbeallowedto
intervenethestateaffairstoensurethefairtreatmentofAfrican
Americans?
Dualfederalismbecameabarriertoaneffectiveresponsetotheseissues
Theeraofdualfederalismwascharacterizedbystatesupremacyinracial
policyandbusinesssupremacyincommercepolicy
FourteenthAmendmentandStateDiscretion
th
The14
Amendmentwasintendedtoprotectnewlyfreedslavesfrom
discriminatoryactionbystategovernments
th
SupremeCourtunderminedthe14
Amendmentspromiseoflibertyand
equalityforall
th
TheCourtheldthatthe14
Amendmentdidnotsubstantiallylimitthe
powerofthestatestodeterminetherightstowhichtheirresidentswere
entitled
Plessyv.Fergusonstategovernmenternmentscouldforceblackstouse
separatefacilitiesaslongasthefacilitieswereequalinqualitytothose
reservedforusebywhites

JudicialProtectionofBusiness
SupremeCourtalsogavenearlyfreereintobusiness
MajorityfavoredlaissezfairecapitalismandinterpretedtheConstitutionin
waysthatrestrictedgovernmentsattemptstoregulatebusinessactivity
Thecourtalsoweakenedthenationalgovernmentsregulatorypowerby
narrowlyinterpretingitscommercepower
ConstitutionscommerceclausesaysthatCongressshallhavethepower
toregulatecommerceamongthestates
Doesnotspelleconomicactivitiesincludedthegrantofpower
BecausetheCourthadpreviouslydecidedthatthestatesregulatory
th
powerswerelimitedbythe14
Amendment,thestateswerenotallowed
toregulatemanufacturingactivityinasignificantway
TheSupremeCourtremainedanobstacletoeffortstocurbabusive
businesspractices
th
10
Amendmentgavethestatesthepowertoregulatefactorypractices
NeitherthepeoplesrepresentativesinCongressnortheirrepresentatives
inthestatelegislatureswereallowedtoregulatebusinessactivity.
Americanscorporations,withtheSupremeCourtastheirprotector,were
incontrol
NationalAuthorityPrevails
TheDemocraticPartywithitsworkingclassbaseattackedtheCourts
position,anditcalledforgreaterregulationofbusinessandmorerights
forlabor
Statestraditionallyhadresponsibilityforhelpingtheunemployed
FranklinRooseveltsNewDealprogramsweredesignedtoeasethe
hardship
NationalIndustryRecoveryAct(NIRA)establishedafederaljobsprogram
andenabledmajorindustriestocoordinatetheirproductiondecisions
InSchechterPoultryCorp.v.UnitedStates,ithaddoneinpreviousNew
Dealcases,theSupremeCourtina54rulingdeclaredtheNIRAtobe
unconstitutional
RooseveltaskedCongresstopasslegislationthatwouldallowa
presidenttonominateanewjusticewheneveraseatedmemberpassed
theageof70andahalf
Courtupheldthat1935NationalLaborRelationsAct,whichgave
employeestherighttoorganizeanbargaincollectively
TheSupremeCourthadfinallyacknowledgedtheobvious:thatan
industrialeconomyisnotconfinedbystateboundariesandmustbe
subjecttonationalregulation
Congressscommercepowerisasbroadastheneedsofthenation
Congresswouldbeallowedtoregulateallaspectsofcommerce
ThecourtalsolooseneditsrestrictionsonCongressspowertotaxand
spend

TheSupremeCourthadfinallyacknowledgedtheobvious:thatan
industrialeconomyisnotconfinedbystateboundariesandmustbe
subjecttonationalregulation
SubsequentSupremeCourtdecisionsalteredtheconstitutionaldoctrine
offederalisminotherpolicyareas,includingcivilrights
ContemporaryFederalism(Since1937)
Therelationofthenationtothestateshaschangedsofundamentallythatdual
federalismisnolongerevenaroughlyaccuratedescriptionoftheAmericansituation
Longerexpansionofnationalauthority
Nationalgovernmentoperatesinmanypolicyareasthatwereoncealmostwithinthe
controlofstatesandlocalities
Federalpowershouldbeusedtoassisttheeconomicallydisadvantaged
Asmallerandmorerecentdevelopmentistheattempttopassdownauthorityfromthe
nationalleveltothestateandlocallevelsinselectedareas
Devolutionpeakedin1990s
InterdependencyandIntergovernmentalRelations
Interdependencyisthereasonwhynationalauthorityhasincreaseddramatically
ProblemsrequiredWashingtontoassumealargerpolicyrole
NationalProblemsNationalSolutions
Encouragednational,state,andlocalpolicymakerstoworktogether
cooperativefederalism
Likenedtothedifferencebetweenalayercake,whoselevelsareseparateanda
marblecake,whoselevelsflowtogether
Cooperativefederalismisbasedonsharedpolicyresponsibilitiesratherthan
sharplydividedones
Theseprogramshavethefollowingcharacteristics:
Jointlyfunded
Jointedadministered
Jointeddetermined
Shouldnotbeinterpretedtomeanthatthestatesarepowerlessanddependence
Forthestateshasincreaseditspolicyinfluenceanddiminishedstatetostate
policydifferences
GovernmentRevenuesandIntergovernmentalRelations
InterdependencyofAmericansocietythefactthatdevelopmentsinonearea
affectwhathappensinelsewhereisoneofthreemajorreasonsthefederal
governmentspolicyrolehasexpandedgreatlysincetheearlytwentiethcentury
Americanswantgovernmentservices
Federalgovernmentssuperiortaxingcapacity
Federalgovernmentraisesasmuchintaxrevenueasdoallfifthstatesandthe
thousandsoflocalgovernmentscombined
FiscalFederalism

Thefederalgovernmentsrevenueraisingadvantagehasmademoneya
basisforrelationsbetweenthenationalgovernmentandthestatesand
localities
Fiscalfederalismreferstotheexpenditureoffederalfundsonprograms
runinpartthroughstateandlocalgovernments
Thefederalgovernmentprovidessomeorallofthemoneythrough
grantsinaidtostatesandlocalities
IncreasedWashingtonspolicyinfluence
Federalprogramineffectdeterminehowstateswillallocatesomeoftheir
owntaxdollars
Pressuredstateandlocalofficialstoadoptnationalgoals
CategoricalandBlockGrants
Stateandlocalgovernmentsreceivetwomajortypesofassistant
categoricalgrantsandblockgrants
Categoricalgrants,themorerestrictivetype,canbeusedonlyfora
designatedactivity
Blockgrantsarelessrestrictivethefederalgovernmentspecifiesthe
generalareainwhichthefundsmustbeused,butstateandlocalofficials
selectthespecificprojects
Devolution
DevolutionembodiestheideathatAmericanfederalismcanbestrengthenedby
apartialshiftinpowerfromthefederalgovernmenttothestateandlocal
government
Federalauthorityhasextendedtoofarintoareastraditionallygovernedthrough
thestateandlocalgovernments
Theexpansionofthefederal
governmentsdomesticpolicyrole
fromthe1930sonwardwaslargely
initiatedbyDemocraticlawmaker,
withstrongbackingfromthepublic
TheNewDealandGreatSociety
programshadbroadpublicsupport
attheoutset
Publicsupportforfederaldomestic
spendingdeclined
Someprogramswerewidelyseenastoocostly,toobureaucratic,andtoolax
RepublicanpresidentsRichardNixonandRonaldReagonproposedversionsofa
newfederalismthatwouldgivemorecontroltostatesandlocalities
TheRepublicanRevolution
Republicanlawmakersproposedtocutsomefederalprogramsbecause
theysoughttodevolvepowertothestateandlocallevels
Reduceunfundedmandatesfederalprogramsthatrequireactionby
statesorlocalitiesbutprovidenoorinsufficientfundstopayforit

TheSupremeCourtsContributiontoDevolution
SupremeCourtheldthatthelinebetweentraditionalandnontraditional
statefunctionswaslegallyvagueandthatstatesshouldrelyonthe
politicalprocessratherthanthecourtsforprotectionagainstwhatthey
regardedasunwarrantedfederalencroachment
TheCourtspositionbegantochangeasaresultoftheappointmentof
moreconservativejustices
Nationalization,theMorePowerfulForce
SupremeCourtrulingscontributedtoashiftinpolicyandpowertothe
sates
Thedevolutionmovementsloweddramaticallyafterpassedofthe1996
WelfareReformAct
NoChildLeftBehindActthrustfederalauthoritymoredeeplythaneverin
localandstateeducationpolicy
Economiccrisistriggeredbythenearcollapseofthefinancialmarketsin
2008contributedtoafurtherincreaseinnationalpower
In2011,Congressmadesignificantcutsinfederalspendingandpassed
legislationthatwillresultinevendeepercutsinfutureyears
ThePublicsInfluence:SettingtheBoundariesofFederalStatePower
AsAmericansattitudestowardthefederalgovernmentandthestateschanged,the
balanceofpowerbetweenthesetwolevelsofgovernmentalsoshifted
DuringtheGreatDepression,stateswouldbeunabletohelp,Americansturnedto
Washingtonforrelief
Thepublicsroleindeterminingtheboundariesbetweenfederalandstatepowerwould
comeasnosurprisetotheframersoftheConstitution