1. 3: Federalism
Forging a Nation

2. The Power of the Federal Government
Based on surveys conducted between 2009 and 2015, Americans who identify with the Republican Party are far more likely than Democratic identifiers to believe that the federal government has “too much power.”
Source: Gallup polls.

3. Federalism: National and State Sovereignty
Sovereignty: supreme and final governing authority
Systems that apportion governmental power:
Unitary system: the national government is sovereign
Confederacy: the states alone are sovereign
Federalism: sovereignty is shared by the national government and the states

4. The Argument for Federalism
Problems with a too-weak national government:
Public disorder
Economic chaos
Inadequate defense
New federal system would divide power among two levels: national and state
Protect liberty
Moderate government power through sharing
Strengthen the union
Promote more responsive government

5. The Powers of the Nation and the States
Enumerated (expressed) powers: power granted to the national government in the Constitution
Seventeen powers, including measures for a secure defense and stable economy
Supremacy clause: national laws were the supreme law of the land
Implied powers: powers of the national government not expressly written but related to those that are listed
“Necessary and proper” clause, or elastic clause: power to make laws in support of enumerated (expressed) powers

6. The Powers of the Nation and the States (2)
Reserved powers: the states’ powers under the Constitution
Tenth Amendment: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States”
Nationalization: the gradual shift in power from the states to the national government

7. National powers
Concurrent powers
State powers
National defense
Lend and borrow money
Charter local governments
Currency
Taxation
Education
Post office
Law enforcement
Public safety
Foreign affairs
Charter banks
Registration and voting
Interstate commerce
Transportation
Intrastate commerce
Figure 3-1 Federalism as a Governing System: Examples of National, State, and Concurrent Powers
The American federal system divides sovereignty between a national government and the state governments. Each is constitutionally protected in its existence and authority, although their powers overlap somewhat even in areas granted to one level (for example, the federal government has a role in education policy).

8. Federalism in Historical Perspective
Ambiguities in the Constitution have contributed to conflict between nation and states
Interstate and intrastate commerce
Federalism has progressed through three historical eras that each ended with a national government stronger than before

9. An Indestructible Union (1789–1865)
Nationalist view: McCulloch v. Maryland (1819), a clear ruling in favor of national power and the supremacy clause
States’ rights view: the Dred Scott decision (1857), a ruling for states’ rights in conflict over the legality of slavery
Civil War settled the issue in favor of national authority

10. Dual Federalism and Laissez-Faire Capitalism (1865–1937)
Dual federalism: the separation of national and state authority was both possible and desirable
Over time, the Fourteenth Amendment was interpreted to give the states discretion
Supreme Court also limited the national power to regulate business and industry
National authority ultimately prevailed as the Supreme Court approved Franklin Roosevelt’s New Deal economic and social programs

11. Contemporary Federalism (Since 1937)
Dual federalism is no longer an accurate description
Larger trend: a long-term expansion of national authority
National government now operates in many policy areas once within the control of states and localities
More recent development: devolution, the attempt to “pass down” authority to the state and local levels in selected areas

12. Interdependency and Intergovernmental Relations
Cooperative federalism: shared policy responsibilities
National, state, and local levels work together
Joint funding, administration, and determination of programs
Example: Medicaid

13. Government Revenues and Intergovernmental Relations
Fiscal federalism: federal funds are used for state programs
Grants-in-aid: cash payments to states and localities
Categorical grants: federal funds restricted to certain state programs
Block grants: federal funds for state programs addressed to a general concern

14. Figure 3-2 Federal, State and Local Shares of Government Tax Revenue
The federal government raises as much tax revenues as do all state and local governments combined.
Source: U.S. Department of Commerce, 2016.

15. Figure 3-3 Federal Grants to State and Local Governments
Federal aid to states and localities has increased dramatically since the 1950s—from less than 50 billion dollars in 1955 to close to 225 billion in Aid then declined somewhat, but has been on the rise since the 1990s. Note: Figures are based on constant (2005) dollars to control for effects of inflation. Figure for each year is the average per year for previous five years. Figure for 2020 is based on OMB estimates.
Source: Office of Management and Budget (OMB), FY2017.

16. Federal Grants-in-Aid to the States
Federal assistance accounts for a significant share of general state revenue. Note: Not included here is restricted revenue, which is revenue that is designated for a specific purpose, such as property tax designated for use in funding local schools.
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Source: U.S. Census Bureau, 2016.

17. Devolution
Devolution: the idea that American federalism can be strengthened by a partial shift of power from the national government to the states
Belief held more strongly by Republicans than Democrats
Dramatically increased after the Republican victories of 1994
Supreme Court has advanced devolution, especially in the latter decades of the twentieth century
Movement waned with the attacks of 9/11 and creation of the Department of Homeland Security; and with the passage of health care reform in 2010

18. The Public’s Influence: Setting the Boundaries of Federal–State Power
Major changes in federalism have been driven by a shift in public support to one level of government or the other
Roosevelt’s “New Deal”—jobs during the Great Depression
Lyndon Johnson’s “Great Society”—increased social services in the 1960s
Republican Revolution—rolled back federal authority in the 1990s

19. Critical Thinking
Distinguish between a federal system, a unitary system, and a confederacy. What circumstances led the framers of the Constitution to create a federal system?
Contrast dual federalism and cooperative federalism. Is the distinction between a layer cake and a marble cake useful in explaining the difference between dual federalism and cooperative federalism?

20. Critical Thinking (2)
How have the federal government’s superior taxing policy and the economic interdependency of the American states contributed over time to a larger policy role for the national government? What role have federal grants-in-aid played in the expansion of federal authority?

21. Long image descriptions
APPENDIX a

22. Federal Grants-in-Aid to the States Appendix
States in which federal grants-in-aid account for 35% or more of state revenue include Alabama, Arizona, Georgia, Kentucky, Louisiana, Maine, Mississippi, Missouri, Montana, New Mexico, Oklahoma, Oregon, South Dakota, Tennessee, and Wyoming.
States in which federal grants-in-aid account for 30–34.9% of state revenue include Arkansas, Florida, Idaho, Indiana, Iowa, Maryland, Michigan, Nebraska, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Vermont, and West Virginia.
States in which federal grants-in-aid account for 30% or less of state revenue include Alaska, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Kansas, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, North Dakota, Virginia, Washington, and Wisconsin.
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