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Chapter Three

Federalism

Governmental Structure

Federalism: a political system where local government units can make final decisions regarding some governmental activities and whose existence is protected

Unitary System: local governments are subservient to the national government

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Federalism


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The Roots of Federalism


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Federalism and You


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Why “Federalism” Matters

Federalism is behind many things that matter to many people:

Tax rates

Speed limits

Liquor laws

School funding

Health insurance


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Figure 3.1: Lines of Power in Three Systems of

Government


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Government


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Government


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Federalism: Good or Bad?

Bad:

Source of confusion and/or controversy, particularly during times of crisis

Impedes progress and caters to local interests

Good:

Contributes to governmental strength, political flexibility, and fosters individual liberty

Federalist #10 - small political units allow all relevant interests to be heard

Federalism increases political activity


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Federalism: A Bold New Plan

No historical precedent

Tenth Amendment was added as an afterthought to clarify the limits of the national government’s power

Elastic language in Article I: Necessary and Proper Clause expands federal power


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Federalism as seen by PoliSci Pros


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Debating the Meaning of Federalism

McCulloch v. Maryland (1819)

Could Congress charter a national bank? Yes, even though this power is not explicitly in the Constitution (Necessary and Proper Clause)

Could states tax the national bank? No, because “the power to tax is the power to destroy”


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Dual FederalismBelief that the national government is supreme in its sphere, but the states are equally supreme in theirs.

These spheres should be kept separate

This idea was pretty much abandoned, particularly in the area of commerce.

However, recent Supreme Court decisions have moved to strengthen states’ rights.


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Federal-State Relations

Grants-in-aid:

Dramatically increased in scope in 20thcentury

Attractive to states for both economic and political reasons

Federal activists work with intergovernmental lobbying groups to determine how and when grants are awarded


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Federal-State Relations

Categorical grants: for specific purposes defined by federal law; often require local matching funds

Block grants: devoted to general purposes with few restrictions—states preferred block to categorical grants

Revenue sharing: requires no matching funds and can be spent on almost any governmental purpose


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Figure 3.2: The Changing Purpose of Federal Grants to State and Local GovernmentsCopyright © Houghton Mifflin Company. All rights reserved.

3 | 18Budget of the U.S. Government, Fiscal Year 2005, table 12.2.

Table 3.1 Federal Grants to State and Local Governments (Federal Fiscal Year

2006)


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Federal Aid and Federal ControlMandates: federal rules that states or localities must obey, whether or not they accept federal grants

When the federal government spends less on a preferred policy, it will pressure the states to spend more in that area

Conditions of aid: tell state governments what they must do if they wish to receive grant money


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A Devolution Revolution?

During Reagan’s presidency, efforts were made to consolidate categorical grants and change them to larger “block grants”, which have fewer strings attached to them.

This was the beginning of the devolution effort, which aimed to pass down many federal functions to the states

Recent studies show that the success of devolution was limited


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The Devolution Revolution

Second-order devolution: the flow of power and money from the states to local governments

Third-order devolution: the increased role of nonprofit organizations and private groups in policy implementation


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PreemptionExpress preemtion: a federal law or regulation containing language explicitly displacing or superceding any conflicting state or local laws

Implied preemtion: a federal law or regulation that directly conflicts with existing state laws, in the areas of intent or implementation


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Congress and Federalism

Members of Congress represent conflicting constituencies

The erosion of parties increases political competition

Americans differ in the extent to which we like federal versus local decisions


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Documents

states rights

political system

federal system

middle federalism

lines of power

middle figure

national bank

federalism mattersfederalism