Federalism

Chapter Three The Logic of American Politics

American-Style Federalism

• In a federal system, authority is divided between two or more distinct levels of government.

• In the United States the division is between the national (federal) government and the states.

American-Style Federalism• Federalism is a hybrid arrangement.

– Mixes elements of a confederation (lower level has real power) and a unitary government (national level monopolizes constitutional authority).

• Before adopting a federal system in the Constitution the nation had experienced both of these alternatives.– Monarchy/parliament – unitary.

– Articles of Confederation – confederation.

American-Style Federalism• Worldwide, unitary governments are far more

common.– Examples: United Kingdom and France.

– Typically, the central government establishes national policies and raises and distributes funds to the local units to carry them out.

• Lower-level units function primarily as the administrative apparatus of the national government.

Qualifications of Federal Systems

• A government must have constitutional relations across levels, interactions that satisfy three general conditions:

1. The same people and territory are included in both levels of government.

2. The nation’s constitution protects units at each level of government from encroachment by the other units.

3. Each unit is in a position to exert some leverage over the other.

Qualifications of Federal Systems

• The second condition, independence, sets the stage for the third condition, mutual influence.

• Independence was the missing ingredient that made the national government impotent under the Articles of Confederation.

Qualifications of Federal Systems

• Note also that local governments are not a separate level of government.

• They are established by the state and do not exercise independent, constitutional authority.

• State law establishes their responsibilities and the extent of their discretion over policies.

Types of Federalism

• Two distinct forms of American federalism have been identified.

– Dual federalism.

– Shared federalism.

Dual Federalism

• The simplest possible arrangement.

• This type of federalism leaves the states and the national government presiding over mutually exclusive “spheres of sovereignty.”

• The nation, however, has never divided authority so neatly.

Dual Federalism

• From the early days of quite limited responsibility for the national government, nationalization has shifted authority to the national side and away from state governments.

• Today the national government has a hand in almost all policies that “concern the lives” of the citizenry.

• Dual federalism no longer describes that nature of federal-state relations.

Shared Federalism

• The second and more accurate conception of federalism is called shared (or “cooperative”) federalism.

• It recognizes that the national and state governments jointly supply services to the citizenry.

• Over the years progressive nationalization has moved American federalism from mostly dual to mostly shared.

Shared Federalism

• Often the scope and complexity of modern problems mandate a joint, cooperative strategy across states and levels of government.

Shared Federalism

• Critics of nationalization argue that the federal government has so intruded into the traditional responsibilities of states and local communities that even “shared” federalism is a misnomer.

• But if there have always been critics, how did we get to this point?

Shared Federalism

• Why have states’ rights advocates had difficulty partitioning federal and state responsibilities?

• As national politicians sought to expand their authority over the years, they discovered that the wall between the federal government and the states was not impregnable.– The Constitution leaves ample room for a variety of

federal-state relations.

• Moreover, when nationalization of public policy proceeded, it rarely triggered a constitutional crisis.

Shared Federalism

• But the question of whether or not the federal government actually assumed responsibility for a specific policy remained (and still is) a political decision.

The Constitution and Federalism

• The greatest victory of states’ righters during the Constitutional Convention was the creation of a Senate whose members were to be selected by the state legislatures.

• Thus senators are beholden to the state legislators.

Constitutional Provisions Governing Federalism

• The ratification of the Constitution was by state conventions that directly represented the people, not by the state governments themselves.

• Thus the people created the government, not the states.

• Language governing the relationship of the national government to the states runs throughout the Constitution. But the end result was a system open to nationalizing forces.

The Supremacy Clause

• “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof [that is, in keeping with the principles of the Constitution] … shall be the supreme law of the land.”

The Supremacy Clause

• The provision of the Constitution with the most profound implication for modern American federalism is the so-called supremacy clause in Article IV.– This clause does not give the federal

government free license.– Framed to avoid impasses over jurisdiction

rather than to cede to the national government broad, preemptive authority over the states.

The Powers of Congress

• Article I, Section 8 lists powers of Congress (enumerated powers).

• These powers are important to federalism because they create jurisdictional boundaries between the states and the national government.

The Powers of Congress

• Some powers are broadly stated and thus helped open up state policy to national intervention. – Example: the commerce clause.

• In addition, the elastic clause (necessary and proper clause) also eventually undermined the restrictive purpose of the enumerated powers.

The Tenth Amendment

• Given the fear of tyranny as articulated by the Antifederalists, it is not surprising that Madison had to promise the addition of a Bill of Rights as an incentive for ratification.

• Many members of the first Congress wanted protections for the states as well as for individual citizens.

• The Tenth Amendment reserves to the states (or the people) all powers not directly given to the national government.

The Tenth Amendment

• The Tenth Amendment offers the most explicit endorsement of federalism to be found in the Constitution.

• Yet despite its plain language, the Tenth Amendment has failed to play a major role in fending off national authority.

• Why?• The powerful combination of the

supremacy and the elastic clauses.

Interpreting the Constitution’s Provisions

• Sweeping language with which the Constitution variously endorses national power and states’ rights has given politicians easy openings to interpret the Constitution according to their own political objectives.

• The “wall” between the federal government and the states is not as impregnable as the Framers had supposed.

Supreme Court as Federal/State Arbitrator

• The Framers envisioned the Supreme Court as the referee of disputes between the national and state governments.– When resolved created

powerful precedents. – Allowed national

policy to develop free of state prerogatives.

• McCulloch v. Maryland (1819)– Protected the national

government from actions of the state.

• Gibbons v. Ogden (1824)– Only Congress possesses

authority to regulate commerce.

• Garcia v. San Antonio Metro Transit Authority (1985)– Federal wage hours applied

to state and local employees.

The Logic of Nationalization

• How does policy become nationalized?

• Generally, two scenarios:– Realities of collective action (problem

solving).

– Purely political considerations (i.e., opportunities for political advantage).

The Logic of Nationalization• The road-building game illustrates an

important lesson in federalism: a state’s jurisdiction over public goods that fall within its borders offers real advantages: efficiency and responsiveness.

• But once the public good encompasses the larger community, the logic for local control disappears.

The Paths to Nationalization

• Throughout the first half of the nineteenth century, America remained a nation of segmented communities that did not require much coordination of commercial endeavors.

The Paths to Nationalization• Changes in the United States:

– Growth– Industrialization– Urbanization– Development of national transportation and

communications systems

• The nation’s desire for public goods that could not be met by local communities and states increased.

The Paths to Nationalization• There are certain things that a local or state

government has difficulty providing.

• Food safety standards and commercial regulation are examples.

• Interstate Commerce Act of 1887:– Regulation of railroads as farmers protested

rate discrimination and high charges.– Antimonopoly laws.

The Paths to Nationalization• The nationalization of public policy grew out of the

requirements of collective action.• First, Americans have at times collectively decided

to adopt policies of such magnitude and scope that they outstripped the resources of the state.– Roosevelt’s New Deal. – Johnson’s War on Poverty/Great Society.

• Second, states have solicited federal intervention when they cannot solve their problems by working together individually.

• Third, it is sometimes easier for the majority to work through Washington, D.C., than through the states. More efficient. Civil rights is a good example.

Historic Transfers of Policy to Washington

• Roosevelt’s New Deal (1930s).

• Johnson’s Great Society (1960s).

• Broadened the scope of federal responsibilities.

• Were accompanied by large national majorities to Congress from the president’s party. A mandate for new collective goods.

The New Deal

• Roosevelt’s New Deal was a comprehensive set of economic regulations and relief programs (massive in size and scope) intended to fight the Great Depression.

• To justify its unprecedented intervention in the economy, FDR invoked the commerce clause.

The Great Society

• Elected in 1964, Lyndon Johnson and his Democratic Congress launched a War on Poverty -- part of a Great Society agenda.

• Passed more than 100 new categorical grant programs.

• Spent over $5 billion 1964-65.• Grants supplemented state

programs/national goals.• Traditional state and local

responsibilities became federal ones.

Nationalization: The Solution to States’ Collective Dilemmas

• The kinds of collective action dilemmas that prompt states to ask Washington for help often fall into one of three categories:

1. Coordination problems.2. Reneging and shirking.3. Cutthroat competition.

Coordination Problems

• A nation composed of fifty states is bound to face coordination problems.

• Example of driver’s license laws:– Lobby to standardization for interstate truckers -- what

led to this federal intervention?

– Creation of bureau within DOT to centralize records of traffic violations.

– Easier to create centralized record keeping than to require each state to update its records with those of every other state.

Coordination Problems

• Another example:– Need to deal with potential blackouts like the one in

August 2003.

– Congress: national regulatory policy of electrical transmission.

– Concern of farmers: surrendering authority (conformity costs) for one agreed purpose might lead the new federal authority to undertake less-desirable policies.

– Regulatory coordination under FERC would allow cheap local electricity to chase market prices and drive up local costs.

Reneging and Shirking

• States may always honor their commitments to their sister states.

• The Constitution and national laws solve many of these dilemmas by authorizing the federal government to take direct action raising resources and administering policy.

• Example: polluted air/water. Without enforcement states continue to pollute.

Cutthroat Competition

• Under the Articles of Confederation each state was free to conduct its own international trade policy.– Foreign governments and merchants would exploit the

competition among the states for their own ends.

– Classic prisoner’s dilemma -- why?

– Negotiating from a united front the best strategy, but states underbid each other or engaged in cutthroat competition.

Cutthroat Competition

• At various times cutthroat competition has prompted state officials to lobby Washington to prevent bidding wars.

• Examples: minimum wage standards, environmental regulation.

• Competition can also emerge as states bid against each other for economic reasons – getting companies to relocate to their state by providing tax breaks or special services.

• States spend as much as $40 billion annually to lure and retain large employers to their states.

The Political Logic of Nationalization• Sometimes those promoting a policy find

that it is in their interest to shift their focus from the states to the national government. Why?– Difficult to lobby/persuade fifty separate

states.– More efficient method – a single federal

law can change policy in all fifty states at once.

– National government may be more receptive.

– Can you think of some recent examples?

The Political Logic of Nationalization

• Sometimes the reverse political process occurs, as groups that lose at the national level see smaller victories in those states where they enjoy majority support.

• Example: social conservatives on the issues of abortion rights and school prayer.

The Political Logic of Nationalization

• As James Madison emphasized in Federalist No. 10, states and the national government combined the citizenry’s preferences into different groupings.

• The result: the two levels of government may adopt different, even opposite, policies to address the same problem.

• Moreover, national majorities have the institutional resources to nationalize many policy questions that once were the exclusive domain of the states.

Transformation of the Senate• In the nineteenth century the equal representation

of states regardless of population, combined with the selection of senators by the state legislatures, gave the Senate the motive and means to defend state prerogatives.

• In 1913 public pressure forced Congress and state legislatures to ratify the Seventeenth Amendment -- complaints that individuals were buying Senate seats with bribes to legislators.

• Consequence: diminishment of one of the props of federalism.

Modern Federalism

• National government’s primacy in setting domestic policy is secure.– Recent Supreme Court decisions

beginning to fence in the federal government’s ability to dictate policy.

– Gains have been modest.– Easily circumvented by an alternative

strategy of financial inducements.

Preemption Legislation

• Federal laws that assert the national government’s prerogative to control public policy in a field.– Relatively little preemption prior to the New Deal.

Afterwards, much more.– Owes its existence to the supremacy clause.

• On balance, federal government has not usurped states’ jurisdictions so much as it has joined with the states in formulating policy.– Result: shared federalism.

• How does the federal government induce cooperation from the constitutionally independent states? – Carrots and sticks.

The Carrot: Federal Grantsto the States

• During the last fifty years federal grants-in-aid became an important part of intergovernmental relations.

• Few grants prior to New Deal.• All of these programs enlist categorical grants, in

which federal dollars are tied to particular programs or categories of spending.

• These grants are inducements to states to carry out particular programs, but they also allow the national government to define these state programs.

The Carrot: Federal Grantsto the States

• Another alternative to categorical grants: block grants.

• Like categorical grants, funds are appropriated to achieve a particular policy goal with specific administrative procedures.– Policy targets are only generally stated. – Fewer strings are attached.

The Stick: Unfunded Mandates• Since the 1960s the federal government has relied

increasingly on rules to pursue policy objectives.• States are required to administer policies they

might object to, and they may even be asked to pay for the administration of the policies.

• Examples: – No Child Left Behind Act.

– Help America Vote Act.

Methods Used to Prescribe State Policy

• The national government uses four basic methods to prescribe state policy and supervise its administration.

1. Cross-cutting requirements.

2. Crossover sanctions.

3. Direct orders.

4. Partial preemption.

Cross-cutting Requirements• Statutes that apply certain rules and

guidelines to a broad array of federally subsidized state programs.

• Example: failure of any state to follow federal guidelines that prohibit discrimination can result in the prosecution of state officials as well as loss of grants.

• Has been used to enforce civil rights laws.

Crossover Sanctions

• Stipulations that to remain eligible for full federal funding for one program a state must adhere to the guidelines of an unrelated program.

• Example: Congress’s stipulation that federal highway funds be tied to state adoption of a minimum drinking age of twenty-one.

• Example: bill restricting sale of soft drinks on school grounds tied to school aid funds.

Direct Orders

• Requirements that can be enforced by legal and civil penalties.

• Example: the Clean Water Act.

Partial Preemption

• Certain federal laws allow the states to administer joint federal-state programs so long as they conform to federal guidelines.

• If an agency fails to follow the instructions of the federal agencies, the state might lose control of the program.– Example: state air pollution policies.

• Public law and the EPA set minimally acceptable standards, but enforcement of these standards rests mostly with state agencies.

Trends in Federal Regulation of States

• Federal grants plentiful before the 1970s; few regulatory policies in place.

• Since the 1970s the more coercive forms of regulation, direct orders and partial preemption, have been favored.

• Federal regulation of states concentrated in two areas: environment and civil rights.

Trends in Federal Regulation of States

• Unfunded Mandates Reform Act.– Required that new federal laws pay for the

programs and regulations they imposed on the states.

• The practice of unfunded mandates and preemptive legislation has continued.

Federalism: A Byproduct of National Policy

• Federal-state relations are dynamic and have been dramatically transformed during the twentieth century.

• Nationalization of public policy is not based on a grand design planned by the Framers but is rather the product of: – Problem solving and constituency service: the

interplay of political interests.

• Likely to continue in this form.