Federalism

9/12/2011Lecture 4

Clearly Stated Learning Objectives

• Upon completion of this course, students will be able to:– understand and interpret the United States

Constitution and apply it to present policy dilemmas.

– understand why our national government works and why the American system of government is unique.

Office Hours

• Tomorrow 8-12• Wednesday 8-10:30

• Free Constitutions for anyone who stops by

Concurrent Powers

• Power shared by Federal and State Governments– Power To Tax

– Make laws protecting Public safety

Income Taxes By State

Interstate Relations :Privileges and Immunities

Interstate Relations: Full Faith and Credit of Public Records

THE EVOLUTION OF FEDERALISM

10th AmendmentThe 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.

So How many governments are there?

The Federal Government

Ok, That’s one

What Else?

50 State

Governments

What Else are there?• 3,034 County Governments• 36,000 Local Governments• 13,000 School Districts• 37,000 Special Districts– Utility Districts- PEC– Hospital Districts– Transit Districts- e.g. CAP Metro– Park Districts– Water Districts- e.g. LCRA– And more!

What Does This Mean?• There are roughly 89,500 governments that

have legal authority over policymaking.

• Some governments are impotent in certain policy areas, while extremely powerful in others.

Things Not Mentioned By the Constitution

• Health Care

• Education

• Police Power

• The Environment

Metaphors of Federalism

Dual and Cooperative Federalism

FEDERALISM TODAYHow Things Get Done

Federalism Today Relies on

• Implied Powers

• 16th Amendment

• 14th Amendment

What is Fiscal Federalism

• Providing Financial incentives for states to pursue national policy goals

• Come in the Form of Grants-in-aid

How important?

Sources

Block Grants

• Few Strings Attached

• States like these

Categorical Grants

• 90% of All Grant Money

• Most require state matching funds

• Less Freedom

Project Grants

• A Type of Categorical Grant

• Competitive

Formula Grants

• Based on specific income or population formulas

• Often census based

Medicaid

• The Biggest Categorical Grant (a formula grant)

• Health Insurance for the Poor

• Demand has increased as have costs

ENTITLEMENTS

Entitlements

• Provide resources directly to individuals

• If You are eligible, you receive the resource

• Bypasses the states altogether.

These are Very Expensive

Social Security

• The Largest Single Federal Program

• A program that everyone loves

• A Program that tracks baby names

Why do we love it?

• Almost everyone gets it- 54 million people were receiving benefits.

• It has very basic goals that are easy to reach

• The average worker gets $1,164 a month

How Do We pay for it?

• Payroll Taxes– I Pay 4.2% of my salary For 2011– St. Edward’s matches this

• There is an upper limit on taxes… for Now (the most you can pay is $4,485.60 )

• The most you can get in benefits is $2366

SOCIAL SECURITY IS IN FINANCIAL TROUBLE

America is Getting Older

Americans are living Longer

There are Fewer Workers

The 2011 Numbers

In 2016 we will begin paying more in benefits than we collect in taxes. Without changes, by 2036 the Social Security Trust Fund will be exhausted* and there will be enough money to pay only about 76 cents for each dollar of scheduled benefits.

Baby Boomers and Recession (2011)

Bankrupt vs. Broke

• Bankrupt- not being able to meet your obligations

• Broke- not having any money

Either way, we need policy change

How to Solve the Problem?

• There are many solutions

• All involve risk and create winners and losers

• Your primary targets are voting constituents