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Federalism
Chapter 3
Federalism
 This lecture is NOT intended to promote
teenage drinking. The focus of this
lecture IS to point out how the Federal
Government and State Governments
interact with each other, using a current,
relevant topic as an example.
 With the exception of the 18th amendment, regulating
liquor sales and setting the minimum age for drinking has
always been the responsibility of state governments. But
in the last 20 years, the national government has found
ways to extend its influence into areas the founders
might never have dreamt of.
 In 1981, 29 states and the District of Columbia allowed 18year-olds to drink
 During the Reagan Administration, the legal drinking age was
raised to 21. If stated failed to comply, they lost federal funding
for highways, beginning in 1986
 Some say the Federal Government had a responsibility to maintain
safety and order
 Others say the law constituted age discrimination and was an
infringement on states’ rights
 Several states sued in federal court, arguing that the law
violated the 10th and 21st Amendments
 10th Amendment – “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”
 21st Amendment  Section 1. The eighteenth article of amendment to the Constitution
of the United States is hereby repealed.
 Section 2. The transportation or importation into any State,
Territory, or possession of the United States for delivery or use
therein of intoxicating liquors, in violation of the laws thereof, is
hereby prohibited. This gave the states the right to determine alcohol
laws for their own state.
 Section 3. This article shall be inoperative unless it shall have been
ratified as an amendment to the Constitution by conventions in the
several States, as provided in the Constitution, within seven years
from the date of the submission hereof to the States by the
Congress
 The Supreme Court ruled, in South Dakota vs. Dole, 1987, that
direct congressional control of a state's minimum age for
drinking would be unconstitutional. However, indirect
control was ok- in his case withholding money from the
states.
 The court said that Congress had an overriding goal
here- ending drunk driving which the court said was related
to interstate travel.
 However, in 1996, Louisiana Supreme Court declared
Congress' attempt to regulate the drinking age was
unconstitutional-age discrimination. After the Clinton
administration told Louisiana it would lose $17 million in
federal highway funds and after intense lobbying and a
rearguing of the case-the court reversed itself 6 months later,
upholding the law. – Is this fair?
 In the fall of 2000, Congress went further, stating that
unless states lowered the legal limit for drunken driving
to .08, they would be in danger of losing 20% of their
federal highway funds over the next three years. Under
pressure from Washington, some states already had
tough laws against drinking already.
 For example, Texas in 1997 adopted a “zero tolerance”
policy on underage drinking- a policy that proved
embarrassing for President Bush when his daughters
were caught trying to buy a drink in Texas.
What’s the point here????
 FEDERALISM IS AT THE CENTER OF IMPORTANT
BATTLES OVER PUBLIC POLICY- IT CAN
DETERMINE THE WINNERS AND LOSERS AT THE
LOCAL, STATE AND NATIONAL LEVELS.
WHOEVER IS IN CHARGE OF THE PRESIDENCY
OR CONGRESS WILL MAKE CRUCIAL
DECISIONS ABOUT HOW WE ARE GOVERNED
AND WHAT THE PROPER ROLE OF
GOVERNMENT WILL BE IN OUR LIVES.
Federalism Defined:
the division of powers between the federal
government and the state governments- it has
been a central and evolving feature of our system
of government. Federalism means that citizens
living in different parts of the country will be
treated differently, not only in spending programs,
but also in the legal system. Examples: criminal
law (state and national); economic regulation
(local, state, national); education (very little federal
control); abortion. Federalism also means that
states are allowed to elect their own leaders, raise
their own revenues and enact their policies.
Three Ways of Ordering Relations Between
Central Governments and Local Units
 Unitary system- (France; UK; Israel; Egypt) most
popular historically and today; allows ultimate
governmental authority to rests in the hands of the
national or central government. If Parliament wants to
redraw local boundaries in the UK, they have the power
to. Compare this to the US. Even if Congress wanted to
abolish Alabama or Idaho they could not. States receive
their power not from the national government but from
the Constitution itself. (This type of system appeals to
those who face opponents at the state or local level.)
Three Ways of Ordering Relations Between
Central Governments and Local Units
 Confederal system - really the opposite of the unitary system;
the states have more power than the central government- and the
states can destroy the central government if they feel it necessary.
 Federal system- (Russia; Canada; Mexico; US) is a relatively rare
type of system worldwide- only 11 of the 197 world governments
are arranged this way. Authority is divided, usually by a written
constitution, between a central government and regional
governments. The central government and the smaller
governments both act directly on the people through laws and the
policies carried out by the people's representatives. (This system
appeals to pluralists and interest groups who have multiple points
of entry when trying to affect policy).
Advantages of Federalism
 1. Permits diversity in policy making- can also protect
the liberty of those at the state and local powers.
 2. Local governments will be able to handle local
problems-they are more in touch with the people
anyway.
 3. There are more levels of access to political
participation- allows for pluralism and democracy.
 4. Increases experimentation with policy- welfare,
education, crime control, etc.
 In general then, federalism allows states to elect their own
leaders, raise their own revenues and enact their own policies.
Disadvantages of Federalism

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Makes national unity and consensus difficult to
reach.
Local governments may tolerate economic or
political inequality.
Local or state governments may openly block
federal policies
May promote hyper-pluralism or extensive
factionalism (tyranny of the majority)
Different Types of Congressional Power
 Expressed (enumerated): which are the first 7
articles of the Constitution) The Constitution does not
specifically delegate or list powers to the state. Because
states had all the power at the time of the writing of
the Constitution, the Framers felt no need to list these
powers, as they did for the national government.
Examples: war, interstate and foreign commerce, and
coining money. These were the powers the Founders
saw as lacking in the Articles of Confederation.
Different Types of Congressional Power
 Reserved (police) powers: of the states: the
10th amendment has been controversial
because it is vague. The ambiguity of the 10th
amendment has allowed the reserved powers of
the states to be defined differently at different
times of our history.
 Generally, since the 19th century, state's rights
advocates have been conservative believers in
limited government. These rights are often used
as justification for restricting abortion or having
the death penalty.
Different Types of Congressional Power
 Implied powers: comes from the necessary and
proper clause or elastic clause. These powers were
dramatically increased under Chief Justice Marshall and
set the stage for a strong national government. The
biggest example of this in the Constitution is Article 1,
sec 8 which has 2 main clauses: commerce; general
welfare (taxes, common defense)
 Inherent powers:These are powers not specifically in
the constitution (foreign affairs, regulation of
immigration, acquiring of territory) but are assumed to
be residing with the national government
Different Types of Congressional Power


Concurrent Powers: the state shares power with the federal
government in certain areas. Most of these powers are
implied- for example the power to tax (local, state, federal);
borrow money; to establish courts; power to charter banks or
corporations, power to hold elections. The states cannot use
their reserved or concurrent powers to usurp the power of
the national government (the SUPREMACY CLAUSE- Article 4;
sec. 2) All national and state officers must swear allegiance to
the Constitution
Prohibited (denied) Powers: these powers were designed
against the national government and state governments. For
example; the national government cannot impose taxes on
exports; the national government cannot set up a national
church or school system. Also, the states cannot do what the
national government does: make their own treaties, coin $,
declare war, etc.
Defining National Power (1803-1828):
Because the constitution never specifically spelled out
what the role of the national government and the states
would be- the balance of power has shifted throughout
the years. In the 18th century the accepted wisdom was
that the sovereignty of the state could not be divided.
Either the federal government or the state government
would be supreme not both. But very early on, the states
and the federal government came into conflict on issues
dealing with economic issues. The first major decision
that Chief Justice Marshall made that dealt with federal
or state supremacy was...
McCulloch v. Maryland (1819) - Maryland tried to tax the
Second Bank's Baltimore branch in an attempt to put the bank out
of business. McCulloch, the bank's cashier, refused to pay the tax; the
issue went to court where Maryland won at the state level; it was
appealed to the US Supreme Court. Constitutional issues
Question #1
Marshal was faced with the question of whether or not Congress
had the power under the necessary and proper clause to charter a
bank. Nothing was mentioned in the Constitution about starting a
national bank and some felt the government was overextending its
powers. Others felt if the government could coin money and
regulate its value, it surely could start a national bank.
Question #2:
If the bank was constitutional, could the state tax it? Marshall's
decision: unanimous
 Answer #1: Although the word "bank" does not appear in the
Constitution, the enumerated powers that gave Congress the
right to levy and collect taxes, issue currency and borrow
money- suggesting to Marshall that the power existed for
Congress to charter a bank. Thus, Marshall established the
doctrine of implied powers; he said that the Constitution was a
living document that had to be interpreted to meet the practical
needs of the government.
 Answer #2: Marshall said that no state could use its taxing
power to tax the national government (the power to tax was the
power to destroy) said the government was up by the people not
the states. Besides, the supremacy clause made it clear to
Marshall that national law was always superior to state law when
the two came into conflict. Marshall's decision became the basis
for strengthening the national government's power from that day
on. Today, practically every expressed power of the national
government has been expanded in one way or another by the
use of the necessary and proper clause.
 State's rights (1829-1865)
 At the heart of the controversy that eventually led to
the Civil War was the issue of national government
supremacy versus the rights of the separate states. After
Marshall died, Chief Justice Roger Taney helped
articulate the notion that concurrent national/state law
was important. Under Taney, the Court took a much
narrower view of the powers of the federal government.
Taney's court invoked the 10th amendment repeatedly
to protect the rights of the states. For example, under
Taney the concept of laissez faire was incorporated into
America's economy. But Taney's Court is best
remembered for its inability to deal adequately with the
slavery issue- something that directly led to the Civil
war. Essentially, the Civil War brought to an ultimate end
and violent end the ideological debate that had been
started by the Federalists and Anti-federalists in 1787.
States’ obligations to each other
 Full faith and credit – In Article IV, Section 1 –
The Constitution requires each state to
recognize the official documents and civil
judgments rendered by the courts of other
states
 Extradition – a legal process whereby an
alleged criminal offender is surrendered by the
officials of one state to the state in which the
crime allegedly occurred
 Dual federalism (Layer Cake) (1865- 1933)
 Prevailed for two reasons:
 1. Supreme Court rulings between 1887-1937 favored
that interpretation
 2. The widespread laissez faire policy toward big
corporations from the government.
 Although the outcome of the Civil war firmly
established the supremacy of the national government
and put to rest the idea that a state could secede from
the Union, the war by no means ended the debate over
the division of powers between the national government
and the states. Dual federalism grew out of the
protracted debate about commerce and who had the
right to regulate it.
 Dual federalism has three major parts to
it:
1. National government rules by enumerated
powers only- all others belong to the states.
 2. Each government (national and state) is
sovereign within its own sphere and these spheres
should be kept separate (i.e., national government
controls foreign and military policy and the postal
system, and states control schools, law
enforcement, building of roads)
 3. The relationship between the states and
national government is characterized by tension
rather than cooperation.
 Cooperative federalism (Marble Cake)
(1933- 1968)
 The era of dual federalism ended with the
onslaught of the Depression. FDR and the New
Deal ushered in a new era of American politics.
FDR was able to sell a brand new ideology to the
American people and congress. Not only was the
scope and role of national government
remarkably altered, but also so was the
relationship between each state and the national
government.
Components of Cooperative Federalism
 Cooperative federalism rests on 2 major
theories:
 The national and state governments should cooperate
on policy.
 It is natural for both governments to routinely share
power.
 In Cooperative federalism, there are:
 Shared costs
 Federal guidelines
 Shared administration
Competitive Federalism (1969-1974)
 As Congress increased the number of federal programs for which
cities were eligible, many critics argued that the federal grants
system was out of hand. Each program had its own complicated
set of rules and formulas for matching and distributing money
along with huge bureaucracies to implement them. Between 1965
and 1980, federal aid to the cities tripled. The fourth phase of
federalism was termed "Competitive Federalism by President
Nixon. Its goal was to restore more power to the state and local
government, particularly by reducing the restrictions attached to
federal grants. The aim of competitive federalism was to offer
states pieces of the marble cake but to have them accept it with
conditions and with a promise to develop programs on their own.
 Under President Nixon's program of REVENUE
SHARING (1969-1986)money was directly given to
the state's and localities without any strings
attached- that is, the national government returned
to the state and local governments a certain portion
of federal taxes. This was the centerpiece of
Nixon's domestic spending program. This program
allowed local officials to make decisions about how
the money was to be spent. The problem with
revenue sharing was that it created constituencies
within the government and not among the voters.
By the end of 1986 though, the government was
saddled by huge budget deficits under Reagan and
this revenue sharing program was disbanded.
New Federalism (1981-1992)
 A perfect example of this occurred under
President Reagan (1981-1989). Reagan
ushered in what came to be known as “New
Federalism" which gave more rights to the
states while still retaining a carrot and stick
approach if the states did not follow the
guidelines of the federal government. While
saying that "government was part of the
problem, not the solution", Reagan still
involved the national government in some
state matters
Devolution & Fiscal
Federalism
 Devolution - transferring responsibility for
policies from the federal government to
the states
 Fiscal federalism – the pattern of
spending, taxing, and providing grants in
the federal system
Types of Grants
One string attached to ALL grants is a nondiscrimination clause
Categorical grants (Grants-in-aid)
 The main source of federal aid to state and local
governments
 Can be used for several hundred specific
purposes or categories
Types of Grants
 Project Grants – Given for specific purposes and
awarded on the basis of the merit of applications
(competition).
 Formula Grants – Distributed according to a
formula (things to consider in formula: population,
per capita income, % of rural population, etc.).
States and local governments do not apply for
these grants.
 Block Grants – Grants given more or less
automatically to states or communities to support
broad programs in areas such as community
development and social services
Mandates:
 State and local governments usually enjoy
receiving federal funding, but sometimes, there
are too many strings attached. Congress can pass
laws requiring states to extend a program if they
want to keep receiving aid
 A mandate includes requirements that direct
state or local governments to comply with
federal rules under threat of penalty or as a
condition of receiving funding (i.e., Medicaid)