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: Article I
Enumerated (expressed) powers: power granted to the national government in the Constitution Article I (Section 8)
Seventeen powers, including measures for a secure defense and assist with foreign policy(raise and support armies and navies, to declare war) and stable economy (to lay and collect taxes, to raise to coin money), and naturalization and immigration.

6. The Powers of the Nation and the States: Article I
Also part of Article I (Section 8)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

7. The Powers of the Nation and the States: Article IV (4)
Article IV (Section 2)
1)Full Faith and Credit: Each state will abide by the civil laws of each other state, including judicial decision made by each state (marriage, adoptions)
2)Privileges and Immunities Clause- Every citizen has the right to travel through other states, reside in any state, participate in business, professional and legal pursuits

8. The Powers of the Nation and the States: Article IV (4)
3)extradition: If a fugitive flees to another state and the governor of the state from which he fled requests his return, then the fugitive must be returned to the state from which he fled

9. The Powers of the Nation and the States: Article VI (6)
Supremacy clause (Article VI) (6): national laws were the supreme law of the land. No other law, state constitution, or government action may override the U.S. Constitution (lawful exercise of national authority would at times conflict with the laws of the states)

10. The Powers of the Nation and the States:10th Amendment (2)
Reserved powers: the states’ powers under the Constitution
Tenth Amendment (10th): “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States”
The Tenth Amendment was seen as strong protection of the states. It turned out to be something less
One view: The national government only has those powers in Article I (Section 8) and all other powers are reserved to the states ( education, policing, morals, intrastate policies)that are not prohibited by the Constitution

11. The Powers of the Nation and the States (2)
Another view: states control only those policies not controlled by the federal government. If an action is within the power of the federal government it’s permissible. If it’s outside the federal government’s power, it’s not.
As a result, the constitutional issue in federal-state disputes is the limit on federal power.
This feature of the Constitution has enabled the national government to intrude on policy areas initially reserved to the states
Nationalization: the gradual shift in power from the states to the national government

12. 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).

13. Federalism in Historical Perspective
Constitution created two centers of power and ambition, each of which was sure to claim disputed areas as belonging to it.
Ambiguities in the Constitution have contributed to conflict between nation and states
Interstate and intrastate commerce
Determined less by constitutional language than by the strength of the contending interests and the country’s changing needs
Federalism has progressed through three historical eras that each ended with a national government stronger than before

14. Federalism in Historical Perspective
Period between : This era is one of state-centered federalism, in which the states managed their own affairs with very little interference from the federal government
From , the most significant issue of federalism was whether the states would accept the lawful authority of the national government

15. An Indestructible Union (1789–1865)
Nationalist view: McCulloch v. Maryland (1819), a clear ruling in favor of national power and the necessary and proper clause (implied powers) (Marshall Court). The power to tax is to destroy, and national governments has ability to tax, raise army and as such needs bank to “carry out” duties
Gibbons v. Ogden (1824) monopoly of the ferry that operated between New York and New Jersey (interstate commerce)

16. An Indestructible Union (1789–1865)
Calhoun US founded upon a compact between states and not a government of individuals. Doctrine of nullification. Congress changed the tariff act and S.Carolina backed down.
States’ rights view: the Dred Scott decision (1857), a ruling for states’ rights in conflict over the legality of slavery (Taney Court)(Split led to Abe Lincoln)
Civil War settled the issue in favor of national authority( )

17. Dual Federalism and Laissez-Faire Capitalism (1865–1937)
Dual federalism: the separation of national and state authority was both possible and desirable (layer cake). Yet with all the transitions, it raised questions about the suitability of dual federalism as a governing concept. Industrial revolution domination of markets and exploitation of workers.
Dual federalism became a barrier to an effective response by either level. From the 1860s through the 1930s, the Supreme Court held firm to the idea that there was a sharp dividing line between national and state authority and than neither level of government be allowed to regulate government

18. Dual Federalism and Laissez-Faire Capitalism (1865–1937)
14th amendment- Was intended to protect the newly freed slaves from discriminatory action by state governments. (giving national govt. more power)
Life, liberty, or property without due process of law, equal protection of the law, and from abridging the privileges or immunities of citizens of the United States
Subsequent decades , however, undermined the Fourteenth Amendment’s promise of liberty and equality for all (1896 Plessy v. Ferguson “separate but equal”)

19. Dual Federalism and laissez-Faire Capitalism (1865-1937)
1913 (income tax and senators elected by people and not state representatives). This will serve to give the national government a lot more power.
After the Civil War, the Supreme Court also gave nearly free reign to business. Majority favored laissez-faire capitalism Corporations were persons and thereby were protected from substantial regulations by the state. (different from corporations are made of persons in recent campaign finance case).

20. Dual Federalism and laissez-Faire Capitalism (1865-1937)
Yet, Court also weakened national government’s regulatory power by narrowly interpreting its commerce clause. For example, interstate commerce covered only the ‘transportation” of goods, not their “manufacture” so didn’t affect the 98% manufacture of sugar in one state. Manufacture was intrastate commerce.
Also, limited state’s regulatory power and so prohibited from regulating manufacturing

21. Dual Federalism and Laissez-Faire Capitalism (1865–1937)
Big question: who was to regulate?? National or state government. Another example: child labor-states to regulate factory practices/earlier case had states blocked from regulating labor practices.
Federal law which prohibited shipment of goods produced by child labor (Hammer v. Dagenhart 1918) but the Court invalidated that law, ruling that the 10th amendment gave the states, and not the federal government the power to regulate factory practices.

22. Contemporary Federalism (Since 1937)
National authority ultimately prevailed as the Supreme Court approved Franklin Roosevelt’s New Deal economic and social programs (1937)
1)Supreme Court- Industry economy is not confined by state boundaries and must be subject to national regulation
2)Supreme Court also loosened its restriction on Congress’s taxing and spending power. (In United States v. Butler (1936), Grant of power limited by “general welfare” of the United States. Broad and involved itself in policy areas controlled by the states

23. 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

24. Interdependency and Intergovernmental Relations
Cooperative federalism: shared policy responsibilities (marble cake) (late 1930’s-1980’S)
National, state, and local levels work together
Joint funding, administration, and determination of programs (jointly administered, with the states and localities providing most of the direct services to recipients and a national agency providing general administration)
Example: Medicaid (1960’s Lyndon Johnson
States have retained most of their traditional authority in areas such as education, health, public safety, and roadways. Yet federal government increased its policy influence and diminished state-to-state policy differences

25. Government Revenues and Intergovernmental Relations
1)The interdependency of American society-development in one area affect what happens elsewhere
2)Americans expect government help/natural disaster. Will fight to keep program once establish. As a consequence federal programs rarely end and new ones get added
3)Federal government’s superior taxing capacity. States with increased corporate and property taxes can move to another state. Rarely do they move to another country in search for lower taxes.

26. 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.

27. Government Revenues and Intergovernmental Relations
4) Fiscal federalism: federal funds are used for state and local programs (because of revenue raising adv). Example of the Power of fiscal federalism- States to receive their full allotment of federal highway funds they had to increase the drinking age to 21 from 18.
5) Grants-in-aid: cash payments to states and localities. (Increases Washington's policy influence; if states accept it they must spend it in the way specified)

28. Types of Assistance to States and Local Governments
States and local governments receive two major types of assistance:
Categorical grants: federal funds restricted to certain state programs (members of Congress like because increases their control and supervision)
Block grants: federal funds for state programs addressed to a general concern (states prefer; gives them more discretion.

29. 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.

30. 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.

31. Devolution
More recent development: devolution, the attempt to “pass down” authority to the state and local levels in selected areas
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
Began with Reagan (Block Grants)
Dramatically increased after the Republican victories of 1994 ( no unfunded mandates; feds would have to provide money.

32. Devolution
Examples Clean Air act of 1963 required states to comply with national air quality standards but did not provide them the funds necessary to implement their plans
Welfare Reform Act of Texas Assistance to Needy Families (TANF) states in control of development training programs /Feds limit after 5 yrs

33. The Continuing Issue of National Power
Supreme Court has advanced devolution, especially in the latter decades of the twentieth century (1990’s) and based it on the 10th and 11th amendments. Lopez case, guns within 1000 feet of school to be determined by states and not the federal government because not interstate but intrastate.
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

34. An Example of Federal Expansion
In National Federation of Independent Business v. Sebelius (20 12), the supreme court by 5-4 upheld the law, ruling that the penalty was in fact a tax and within Congress’s power to impose.
The Court commerce ruling was also decided by a 5-4 vote. Here, the Court sided with the Republican argument that Congress cannot force people to engage in commerce
(book on p.87)

35. 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 (Shift loyalty to which ever suits needs).
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
Reagan “ Federalism is rooted in the knowledge that our political liberties are best assured by limiting the size and scope of national government” Advocated block grants

36. 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?

37. 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?

38. Long image descriptions
APPENDIX a

39. 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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