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Chapter ThreeChapter Three

FederalismFederalism

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Why “Federalism” MattersWhy “Federalism” Matters

Federalism is behind many things that Federalism is behind many things that matter to many people:matter to many people: Tax ratesTax rates Speed limitsSpeed limits Liquor lawsLiquor laws School fundingSchool funding Health insuranceHealth insurance

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Governmental StructureGovernmental Structure

Federalism:Federalism: a political system where local a political system where local government units can make final decisions government units can make final decisions regarding some governmental activities regarding some governmental activities and whose existence is protectedand whose existence is protected

Unitary System:Unitary System: local governments are local governments are subservient to the national governmentsubservient to the national government

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Figure 3.1: Lines of Power in Figure 3.1: Lines of Power in Three Systems of GovernmentThree Systems of Government

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Figure 3.1: Lines of Power in Figure 3.1: Lines of Power in Three Systems of GovernmentThree Systems of Government

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Figure 3.1: Lines of Power in Figure 3.1: Lines of Power in Three Systems of GovernmentThree Systems of Government

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Federalism: Good or Bad?Federalism: Good or Bad?

Bad:Bad: Source of confusion and/or controversy, particularly Source of confusion and/or controversy, particularly

during times of crisisduring times of crisis Impedes progress and caters to local interestsImpedes progress and caters to local interests

Good:Good: Contributes to governmental strength, political Contributes to governmental strength, political

flexibility, and fosters individual libertyflexibility, and fosters individual liberty Federalist #10 - small political units allow all relevant Federalist #10 - small political units allow all relevant

interests to be heardinterests to be heard Federalism increases political activityFederalism increases political activity

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Federalism: A Bold New PlanFederalism: A Bold New Plan

No historical precedentNo historical precedent Gov’t (nat’l and state) derived its powers Gov’t (nat’l and state) derived its powers

directly from the peopledirectly from the people Refer to Refer to FederalistFederalist #46 and #28 (info on p.54) #46 and #28 (info on p.54)

Tenth Amendment was added as an Tenth Amendment was added as an afterthought to clarify the limits of the afterthought to clarify the limits of the national government’s powernational government’s power

Elastic language in Article I: Necessary Elastic language in Article I: Necessary and Proper Clause expands federal powerand Proper Clause expands federal power

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Hamilton vs. JeffersonHamilton vs. Jefferson

Hamilton’s views:Hamilton’s views: The nat’l gov’t was The nat’l gov’t was

superior in political affairs superior in political affairs and its powers ought to and its powers ought to be broadly defined and be broadly defined and liberally construed. liberally construed.

Used Article VI Used Article VI “supremacy” clause to “supremacy” clause to justify his views.justify his views.

Jefferson’s views:Jefferson’s views: Federal gov’t was based Federal gov’t was based

on agreements b/t the on agreements b/t the states; people were states; people were sovereign.sovereign.

Powers of nat’l gov’t Powers of nat’l gov’t should be narrowly should be narrowly construed and strictly construed and strictly limited.limited.

Later supported by Later supported by Madison in the Madison in the FederalistFederalist #45.#45.

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Debating the Meaning of Debating the Meaning of FederalismFederalism

McCulloch v. MarylandMcCulloch v. Maryland (1819) (1819) Could Congress charter a national bank? Could Congress charter a national bank? Yes, even though this power is not explicitly in the Yes, even though this power is not explicitly in the

Constitution (Necessary and Proper Clause)Constitution (Necessary and Proper Clause) Could states tax the national bank? Could states tax the national bank? No, because “the power to tax is the power to No, because “the power to tax is the power to

destroy”destroy” This case gave credence to both the necessary and This case gave credence to both the necessary and

proper clause and the supremacy clause.proper clause and the supremacy clause.

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NullificationNullification The struggle of states’ rights vs. national supremacy The struggle of states’ rights vs. national supremacy

could also be witnessed in how the Supreme Court can could also be witnessed in how the Supreme Court can decide a case w/o settling the issue.decide a case w/o settling the issue.

This became a major issue when the ideas of This became a major issue when the ideas of nullificationnullification were put into practice. were put into practice.

In 1798 VA and KY said that states had the right to In 1798 VA and KY said that states had the right to “nullify” a federal law that they believed violated the “nullify” a federal law that they believed violated the Constitution.Constitution.

John C. Calhoun would bring the issue up again before John C. Calhoun would bring the issue up again before the Civil War.the Civil War.

After the Civil War, the decision was made that states After the Civil War, the decision was made that states cannot declare acts of Congress unconstitutional.cannot declare acts of Congress unconstitutional.

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Dual FederalismDual Federalism

Belief that the national government is Belief that the national government is supreme in its sphere, but the states are supreme in its sphere, but the states are equally supreme in theirs.equally supreme in theirs.

These spheres should be kept separate.These spheres should be kept separate. This idea was pretty much abandoned, This idea was pretty much abandoned,

particularly in the area of commerce.particularly in the area of commerce. However, recent Supreme Court decisions However, recent Supreme Court decisions

have moved to strengthen states’ rights.have moved to strengthen states’ rights. See major cases on pgs.59-60See major cases on pgs.59-60

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Federal-State RelationsFederal-State Relations

Grants-in-aid:Grants-in-aid: Dramatically increased in scope in 20Dramatically increased in scope in 20 thth

CenturyCentury Attractive to states for both economic and Attractive to states for both economic and

political reasonspolitical reasons Federal activists work with intergovernmental Federal activists work with intergovernmental

lobbying groups to determine how and when lobbying groups to determine how and when grants are awardedgrants are awarded

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Federal-State RelationsFederal-State Relations Categorical grants:Categorical grants: for specific purposes for specific purposes

defined by federal law; often require local defined by federal law; often require local matching fundsmatching funds Examples:Examples:

Block grants:Block grants: devoted to general purposes with devoted to general purposes with few restrictions—states preferred block to few restrictions—states preferred block to categorical grantscategorical grants

Revenue sharing:Revenue sharing: requires no matching funds requires no matching funds and can be spent on almost any governmental and can be spent on almost any governmental purposepurpose

Look at p.65 for more information that you need Look at p.65 for more information that you need to know!to know!

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Figure 3.2: Figure 3.2: The Changing The Changing Purpose of Purpose of Federal Federal Grants to Grants to State and State and Local Local GovernmentsGovernments

Budget of the U.S. Government, Fiscal Year 2005, table 12.2.

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Table 3.1 Federal Grants to State and Table 3.1 Federal Grants to State and Local Governments (Federal Fiscal Year Local Governments (Federal Fiscal Year

2006)2006)

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Federal Aid and Federal ControlFederal Aid and Federal Control

Mandates:Mandates: federal rules that states or federal rules that states or localities must obey, whether or not they localities must obey, whether or not they accept federal grantsaccept federal grants When the federal government spends less on When the federal government spends less on

a preferred policy, it will pressure the states to a preferred policy, it will pressure the states to spend more in that areaspend more in that area

Conditions of aid:Conditions of aid: tell state governments tell state governments what they must do if they wish to receive what they must do if they wish to receive grant moneygrant money

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A Devolution Revolution?A Devolution Revolution?

During Reagan’s presidency, efforts were During Reagan’s presidency, efforts were made to consolidate categorical grants made to consolidate categorical grants and change them to larger “block grants”, and change them to larger “block grants”, which have fewer strings attached to them.which have fewer strings attached to them.

This was the beginning of the devolution This was the beginning of the devolution effort, which aimed to pass down many effort, which aimed to pass down many federal functions to the statesfederal functions to the states

Recent studies show that the success of Recent studies show that the success of devolution was limiteddevolution was limited

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The Devolution RevolutionThe Devolution Revolution

Second-order devolution: the flow of Second-order devolution: the flow of power and money from the states to local power and money from the states to local governmentsgovernments

Third-order devolution: the increased role Third-order devolution: the increased role of nonprofit organizations and private of nonprofit organizations and private groups in policy implementationgroups in policy implementation

See pgs.70-71 for examplesSee pgs.70-71 for examples

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PreemptionPreemption

Express preemption: a federal law or Express preemption: a federal law or regulation containing language explicitly regulation containing language explicitly displacing or superceding any conflicting displacing or superceding any conflicting state or local lawsstate or local laws

Implied preemption: a federal law or Implied preemption: a federal law or regulation that directly conflicts with regulation that directly conflicts with existing state laws, in the areas of intent or existing state laws, in the areas of intent or implementationimplementation

See pgs.70-71 for examplesSee pgs.70-71 for examples

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Congress and FederalismCongress and Federalism

Members of Congress represent Members of Congress represent conflicting constituenciesconflicting constituencies

The erosion of parties increases political The erosion of parties increases political competitioncompetition

Americans differ in the extent to which we Americans differ in the extent to which we like federal versus local decisionslike federal versus local decisions

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Theories of FederalismTheories of Federalism

Dual federalism or “Layer Cake” Dual federalism or “Layer Cake” FederalismFederalism

Cooperative federalism or “Marble Cake” Cooperative federalism or “Marble Cake” FederalismFederalism

Regulated federalismRegulated federalism New federalismNew federalism

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