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FederalismChapter ThreeFederalismGovernmental StructureFederalism: a political system where local government units can make final decisions regarding some governmental activities and whose existence is protectedUnitary System: local governments are subservient to the national governmentCopyright Houghton Mifflin Company. All rights reserved.3 | 2FederalismCopyright Houghton Mifflin Company. All rights reserved.3 | 3The Roots of FederalismCopyright Houghton Mifflin Company. All rights reserved.3 | 4Federalism and YouCopyright Houghton Mifflin Company. All rights reserved.3 | 5Why Federalism MattersFederalism is behind many things that matter to many people:Tax ratesSpeed limitsLiquor lawsSchool fundingHealth insuranceCopyright Houghton Mifflin Company. All rights reserved.3 | 6Figure 3.1: Lines of Power in Three Systems of GovernmentCopyright Houghton Mifflin Company. All rights reserved.3 | 77Insert figure 3.1, but just the drawing of the federal system (the one in the middle)Figure 3.1: Lines of Power in Three Systems of GovernmentCopyright Houghton Mifflin Company. All rights reserved.3 | 88Insert figure 3.1, but just the drawing of the federal system (the one in the middle)Figure 3.1: Lines of Power in Three Systems of GovernmentCopyright Houghton Mifflin Company. All rights reserved.3 | 99Insert figure 3.1, but just the drawing of the federal system (the one in the middle)Federalism: Good or Bad?Bad:Source of confusion and/or controversy, particularly during times of crisisImpedes progress and caters to local interestsGood:Contributes to governmental strength, political flexibility, and fosters individual libertyFederalist #10 - small political units allow all relevant interests to be heardFederalism increases political activityCopyright Houghton Mifflin Company. All rights reserved.3 | 10Federalism: A Bold New PlanNo historical precedentTenth Amendment was added as an afterthought to clarify the limits of the national governments powerElastic language in Article I: Necessary and Proper Clause expands federal powerCopyright Houghton Mifflin Company. All rights reserved.3 | 11Federalism as seen by PoliSci ProsCopyright Houghton Mifflin Company. All rights reserved.3 | 12Debating the Meaning of FederalismMcCulloch 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 destroyCopyright Houghton Mifflin Company. All rights reserved.3 | 13Copyright Houghton Mifflin Company. All rights reserved.3 | 14Dual FederalismBelief that the national government is supreme in its sphere, but the states are equally supreme in theirs.These spheres should be kept separateThis idea was pretty much abandoned, particularly in the area of commerce.However, recent Supreme Court decisions have moved to strengthen states rights.Copyright Houghton Mifflin Company. All rights reserved.3 | 15Federal-State RelationsGrants-in-aid:Dramatically increased in scope in 20thcenturyAttractive to states for both economic and political reasonsFederal activists work with intergovernmental lobbying groups to determine how and when grants are awardedCopyright Houghton Mifflin Company. All rights reserved.3 | 16Federal-State RelationsCategorical grants: for specific purposes defined by federal law; often require local matching fundsBlock grants: devoted to general purposes with few restrictionsstates preferred block to categorical grantsRevenue sharing: requires no matching funds and can be spent on almost any governmental purposeCopyright Houghton Mifflin Company. All rights reserved.3 | 17Figure 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 12.2.18Insert figure 3.2Table 3.1 Federal Grants to State and Local Governments (Federal Fiscal Year 2006)Copyright Houghton Mifflin Company. All rights reserved.3 | 1919Insert figure 3.3Federal Aid and Federal ControlMandates: federal rules that states or localities must obey, whether or not they accept federal grantsWhen the federal government spends less on a preferred policy, it will pressure the states to spend more in that areaConditions of aid: tell state governments what they must do if they wish to receive grant moneyCopyright Houghton Mifflin Company. All rights reserved.3 | 20A Devolution Revolution?During Reagans 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 statesRecent studies show that the success of devolution was limitedCopyright Houghton Mifflin Company. All rights reserved.3 | 21The Devolution RevolutionSecond-order devolution: the flow of power and money from the states to local governmentsThird-order devolution: the increased role of nonprofit organizations and private groups in policy implementationCopyright Houghton Mifflin Company. All rights reserved.3 | 22PreemptionExpress preemtion: a federal law or regulation containing language explicitly displacing or superceding any conflicting state or local lawsImplied preemtion: a federal law or regulation that directly conflicts with existing state laws, in the areas of intent or implementationCopyright Houghton Mifflin Company. All rights reserved.3 | 23Congress and FederalismMembers of Congress represent conflicting constituenciesThe erosion of parties increases political competitionAmericans differ in the extent to which we like federal versus local decisionsCopyright Houghton Mifflin Company. All rights reserved.3 | 24

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