1. 3 The Federal System Lewis W Hine/Getty Images
IMMIGRATION IS AN INTERGOVERNMENTAL PROBLEM Public policy on immigration—and balancing an individual's liberty of movement with the country's security—requires the cooperation of local, state, national, and international governments. Above, European immigrants are screened for entry at Ellis Island, New York, in the 1890s. Below, Hmong immigrants receive health certifications before immigrating to the United States in the present day.
Immigration is a politically contentious subject that requires cooperation between national, state, and local governments. The United States has a federal system of government, which is the subject of this chapter.
Lewis W Hine/Getty Images

2. 3
Learning Objectives
Trace the roots of the federal system and the Constitution's allocation of powers between the national and state governments.
3.1
Determine the impact of the Marshall Court on federalism.
This chapter will describe the origins of the federal system in the United States. Then we will see how the system was affected by early Supreme Court decisions and how it has evolved to meet changing needs.
3.2

3. 3
Learning Objectives
Describe the emergence and decline of dual federalism.
3.3
Explain how cooperative federalism led to the growth of the national government at the expense of the states.
3.4

4. 3
Learning Objectives
Describe how the federal budget is used to further influence state and local government's policies.
3.5
Explore the role of the judiciary as arbiter of federal–state conflicts.
3.6

5. 3
Learning Objectives
Assess the challenges in balancing national and state powers and the consequences for policy making.
3.7

6. Roots of the Federal System
3.1
Roots of the Federal System
National Powers Under the Constitution
State Powers Under the Constitution
Concurrent Powers Under the Constitution
Powers Denied Under the Constitution
Interstate Relations Under the Constitution
Local Governments Under the Constitution
This first section will cover the division of powers under the federal system. The national government has both enumerated and implied powers under the Constitution. National and state governments share an additional group of concurrent powers. Other powers are reserved for the states, or expressly denied to both governments. The powers of the national government are ultimately declared supreme. Local governments are not expressly mentioned in the Constitution and instead are granted powers by the state.

7. National Powers Under the Constitution
3.1
National Powers Under the Constitution
Enumerated powers
Coin money
Conduct foreign relations
Provide for army and navy
Declare war
Collect duties and taxes
Article I, section 8, of the Constitution specifically lists powers granted to the government. These powers are called enumerated powers. The national government has the authority to:
coin money
conduct foreign relations
provide for an army and navy
declare war
collect taxes
The so-called elastic clause gives Congress the authority to enact laws "necessary and proper" for exercising its enumerated powers. These powers are derived from enumerated powers and are known as implied powers.
The supremacy clause declares that national laws are supreme when they conflict with state laws.

8. National Powers Under the Constitution
3.1
National Powers Under the Constitution
Necessary and proper clause (elastic)
Enact laws for exercising enumerated powers
Implied powers
Supremacy clause
Article I, section 8, of the Constitution specifically lists powers granted to the government. These powers are called enumerated powers. The national government has the authority to:
coin money
conduct foreign relations
provide for an army and navy
declare war
collect taxes
The so-called elastic clause gives Congress the authority to enact laws "necessary and proper" for exercising its enumerated powers. These powers are derived from enumerated powers and are known as implied powers.
The supremacy clause declares that national laws are supreme when they conflict with state laws.

9. 3.1 FIGURE 3.1: Where does governmental authority come from?
This figure shows three ways to organize a governmental system.
A unitary system of government has a strong central government; state and local governments derive their power from the national government.
In a confederation, the government derives its power from the states. Having experienced the challenges of a unitary government under King George, and a confederate system under the Articles of Confederation, the Framers of the Constitution chose a federal system. The power of both state and national governments comes from the people.

10. When do national and state governments work together?
3.1
When do national and state governments work together?
Intergovernmental cooperation is required to implement many public policies, such as the recent American Recovery and Reinvestment Act, which was enacted as part of the effort to stimulate the economy and create jobs. Here, work begins on a road construction project jointly funded by the national government and
the state of Ohio.
Charles Dharapak/AP Images

11. State Powers Under the Constitution
3.1
State Powers Under the Constitution
State powers not enumerated
Tenth Amendment
Reserved powers
Because states held all the power at the time the Constitution was written, the Framers felt no need to list and restate all of the powers of the states, although some are specified throughout the Constitution.
The states' powers were described in greater detail in the 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 respectively, or to the people." These powers are often called the states' reserved powers.

12. Concurrent Powers Under the Constitution
3.1
Concurrent Powers Under the Constitution
Overlapping powers
Power to tax
Borrow money
Establish courts
Charter banks
Spend money for general welfare
National and state powers overlap. These concurrent powers—powers shared by the national and state governments—include the power to tax, borrow money, establish courts, charter banks, and spend money for the general welfare.

13. 3.1
FIGURE How is governmental power distributed in the federal system?
The Constitution divides power between the national and state governments. It gives the national government a list of enumerated powers, while many state powers are captured in the reserved powers clause of the Tenth Amendment. The national and state governments also share some powers, known as concurrent powers.

14. Powers Denied Under the Constitution
3.1
Powers Denied Under the Constitution
No state favoritism
No titles of nobility
Bills of attainder
Ex post facto laws
Article I of the Constitution explicitly denies some powers to the national government or states. Congress, for example, cannot regulate commerce in a way that would favor one state over another, and it cannot place duties on items exported from any state. Article I also prohibits the national government from granting titles of nobility, and government employees may not accept salaries or gifts from foreign heads of state.
Neither national nor state governments may pass a bill of attainder, a law declaring an act illegal without a judicial trial. The Constitution also bars national and state governments from passing ex post facto laws. This means that a law cannot be passed making an act punishable as a crime even if the action was legal at the time it was committed.

15. Interstate Relations Under the Constitution
3.1
Interstate Relations Under the Constitution
Supreme Court settles disputes
Full faith and credit clause
Privileges and immunities clause
Extradition clause
Interstate compacts
To avoid any appearance of favoritism, the Constitution authorizes the Supreme Court to settle disputes between states.
Article IV requires that each state give "Full Faith and Credit to the public Acts, Records, and judicial Proceedings of every other State." The full faith and credit clause ensures that judicial decrees and contracts made in one state will be binding and enforceable in another, thereby facilitating trade and other commercial relationships.
Article IV also contains the privileges and immunities clause, guaranteeing that the citizens of each state have the same rights as citizens of all other states. Does this clause mean that same-sex marriage that is legal in one state must be recognized in states where it is not legal?
The extradition clause, which requires states to extradite, or return, criminals to states where they have been convicted or are to stand trial.
Interstate compacts are contracts between states that carry the force of law. Currently, more than 200 interstate compacts exist.

16. Local Governments Under the Constitution
3.1
Local Governments Under the Constitution
No power under Constitution
Operate under state charter (Dillon's Rule, 1868)
Counties
Local governments have no express power under the U.S. Constitution.
According to Dillon's Rule, stated by Judge John F. Dillon in 1868, local governments need a state charter to operate. The charter is similar to a constitution.
Counties are the basic administrative units of local government. Every state has counties, although in Louisiana they are called parishes, and in Alaska, boroughs. Municipalities are city governments created in response to the emergence of relatively densely populated areas. County and municipal boundaries may overlap.
The term town refers to smaller communities, often run by a mayor and town council.
A special district is a local government restricted to a particular function, such as a school district. Special districts are the most numerous form of government.
Activity: Ask students to identify all of the governments that have authority and policymaking responsibilities in their area, from the federal and state governments to the various types of local government. At the same time, have them identify the types of public policies for which they are responsible.

17. Local Governments Under the Constitution
3.1
Local Governments Under the Constitution
Municipalities
Towns
Special districts
Most numerous form of government
Local governments have no express power under the U.S. Constitution.
According to Dillon's Rule, stated by Judge John F. Dillon in 1868, local governments need a state charter to operate. The charter is similar to a constitution.
Counties are the basic administrative units of local government. Every state has counties, although in Louisiana they are called parishes, and in Alaska, boroughs. Municipalities are city governments created in response to the emergence of relatively densely populated areas. County and municipal boundaries may overlap.
The term town refers to smaller communities, often run by a mayor and town council.
A special district is a local government restricted to a particular function, such as a school district. Special districts are the most numerous form of government.
Activity: Ask students to identify all of the governments that have authority and policymaking responsibilities in their area, from the federal and state governments to the various types of local government. At the same time, have them identify the types of public policies for which they are responsible.

18. 3.1 FIGURE 3.3 How many governments exist in the United States?
More than 89,000 governments exist in the United States. Most of these governments are found at the local level, and are divided between municipal governments, towns, and special districts, such as school districts. The most common form of government is the special district.
Source: U.S. Census Bureau,

19. 3.1
3.1 What is the source of
governmental authority in the U.S. federal system?
The states
The people
The president
The federal legislature (Congress)
What have we learned about how power is divided among governments in the United States? Please answer the following question.

20. 3.1
3.1 What is the source of
governmental authority in the U.S. federal system?
The states
The people
The president
The federal legislature (Congress)
Both national and state governments operate by the consent of the governed. The people grant authority to the government in exchange for protections and public goods.

21. Federalism and the Marshall Court
3.2
Federalism and the Marshall Court
Defining National Power
McCulloch v. Maryland (1819)
Affirming National Power
Gibbons v. Ogden (1824)
Limiting the Bill of Rights
Barron v. Baltimore (1833)
In this section we will learn why the Supreme Court under the leadership of Chief Justice John Marshall played a key role in defining the relationship and powers of the national government. The Courts broadly interpreted the supremacy and commerce clauses, thereby expanding the powers of the federal government.

22. Defining National Power: McCulloch v. Maryland (1819)
3.2
Defining National Power: McCulloch v. Maryland (1819)
First Court decision to define national and state government relationship
Could Congress charter a bank?
Could states tax it?
In 1816, Congress chartered the Second Bank of the United States. In 1818, the Maryland state legislature levied a tax on it. James McCulloch, the head cashier of the Baltimore branch of the Bank of the United States, refused to pay the tax, and Maryland brought suit against him. In a unanimous opinion, the Supreme Court answered the two central questions presented to it: Did Congress have the authority to charter a bank? And, if it did, could a state tax it?
Congress had enumerated powers to borrow money and collect taxes. The constitution does not say that Congress can charter a bank, but Chief Justice Marshall found it was reasonable that Congress had the power to charter a bank, which could be considered "necessary and proper" to exercise its enumerated powers.
Marshall next addressed whether a state could tax a federal bank. To Marshall, this was not a difficult question. The state tax violated the supremacy clause because individual states cannot interfere with operations of the national government, whose laws are supreme.
The Court's decision in McCulloch had far-reaching consequences. Lawmakers use the necessary and proper clause to justify federal action in many areas. Furthermore, had Marshall allowed the state of Maryland to tax the federal bank, states could have attempted to tax all federal agencies located within their boundaries.

23. Affirming National Power: Gibbons v. Ogden (1824)
3.2
Affirming National Power: Gibbons v. Ogden (1824)
Congress's authority under commerce clause disputed
Power to regulate just products or commercial activity too?
Ruling:
Congress can regulate commercial activity
New York had no authority to grant monopoly
Shortly after McCulloch, the Marshall Court had another opportunity to rule in favor of a broad interpretation of the scope of national power. Gibbons v. Ogden involved a dispute that arose after the New York state legislature granted to Robert Fulton the exclusive right to operate steamboats on the Hudson River. Simultaneously, Congress licensed a ship to sail on the same waters.
Gibbons addressed this question: What was the scope of Congress's authority under the commerce clause? The states argued that "commerce," as mentioned in Article I, should be interpreted narrowly to include only direct dealings in products.
The Supreme Court ruled that Congress's power to regulate interstate commerce included the power to regulate commercial activity. Thus, New York had no constitutional authority to grant a monopoly to a single steamboat operator, an action that interfered with interstate commerce.

24. Limiting the Bill of Rights: Barron v. Baltimore (1833)
3.2
Limiting the Bill of Rights: Barron v. Baltimore (1833)
Due process clause
Guaranteed by Fifth Amendment
Action by state, not federal, government caused damages
Federal government not at fault for state actions
In Barron v. Baltimore, the Court addressed the issue of whether the due process clause of the Fifth Amendment applied to actions of the states. John Barron, a Baltimore businessman, ran a successful docking business off the city's wharf. During extensive construction, the city deposited dirt onto Barron's wharf. Barron sued the city and state for damages, arguing that the city took his lands "without just compensation," as guaranteed by the Fifth Amendment.
The Marshall Court ruled that Barron had no federal claim because enumerated rights contained in the Bill of Rights bound only the national government.

25. 3.2 Which Supreme Court cases
restricted the powers of the national government?
Barron v. Baltimore (1833)
McCulloch v. Maryland (1819)
Gibbons v. Ogden (1824)
None of the above
We have talked about quite a few important Supreme Court cases in this section. Let's see if you can remember which is which by answering this brief multiple choice question.

26. 3.2 Which Supreme Court cases
restricted the powers of the national government?
Barron v. Baltimore (1833)
McCulloch v. Maryland (1819)
Gibbons v. Ogden (1824)
None of the above
McCulloch v. Maryland and Gibbons v. Ogden expanded national powers by broadly interpreting implied powers and the right to regulate commerce. Barron v. Baltimore made a distinction between national and states' rights.

27. Dual Federalism: States' Rights, the Civil War, and Reconstruction
3.3
Dual Federalism: States' Rights, the Civil War, and Reconstruction
The States Assert Their Powers: Nullification
The Dred Scott Decision
Reconstruction and the Transformation of Dual Federalism
Amending the National-State Relationship
Dual federalism features separate but equally powerful state and national governments. States used their authority to regulate issues such as slavery. Nullification gave states the power to declare national laws invalid, at least in their opinion. As we will see in this section, the Civil War changed the nature of federalism as the national government grew in power at the expense of the states.

28. States Assert Their Powers: Nullification
3.3
States Assert Their Powers: Nullification
Nullification is the right of a state to declare a federal law void.
Nullification was proposed by Thomas Jefferson, James Madison, and others who opposed the Alien and Sedition Acts, which were passed to prevent criticism of the federal government. Jefferson felt that states had a right to nullify any federal law that they believed violated the Constitution.
When Congress passed a tariff act disliked by South Carolina, the southern states resurrected the nullification theory as a justification for its refusal to abide by the law.
They theorized that states' rights were supreme. If the people of any individual state did not like an act of Congress, they could hold a convention to nullify that act. If a state contested an act, the law would have no force until three-fourths of all the states ratified an amendment expressly giving Congress that power. Then, if the nullifying state still did not wish to be bound by the new provision, it could secede, or withdraw, from the union.
Nullification
States declare federal laws void
Alien and Sedition Acts (1798)
Unconstitutional
"Tariff of Abominations" (1828)
Southern states use nullification to resist anti-slavery laws

29. The Dred Scott Decision
3.3
The Dred Scott Decision
Dred Scott v. Sandford (1857)
Slaves were property, not citizens.
Congress could not ban slavery in new territories.
Enhanced states' power
States' rights continued in the issue of slavery. Dred Scott had been born into slavery but had lived at one time in territory that was not a slave state. Abolitionists used that prior residence to argue that he had been made a free man.
The Court disagreed, ruling that slaves were property. Further, Congress could not ban slavery in territories. This ruling narrowed the scope of national power in favor of states' rights.

30. Reconstruction and the Transformation of Dual Federalism
3.3
Reconstruction and the Transformation of Dual Federalism
Nullification, dual federalism destroyed by Civil War
Reconstruction
New state constitutions
Supreme Court limits state power
Monopolies outlawed
After the Civil War, nullification and dual federalism ended. Congress passed the Thirteenth, Fourteenth, and Fifteenth Amendments to the Constitution to protect the rights of freed slaves. During Reconstruction, southern states were required to adopt new state constitutions approved by Congress.
The Supreme Court also stepped in to limit state powers in favor of a stronger national government. It allowed Congress to pass anti-trust laws and outlaw monopolies. This kind of regulation had previously been left to the states.
The national government took on a greater role in projects such as railroad construction, canal building, and the development of the telegraph.

31. 3.3
How did the relationship between state and national governments change after the Civil War?
Construction of coast-to-coast transportation systems, such as the intercontinental Railroad, shown here, necessitated a greater role for the national government. These changes also helped to doom the system of dual federalism, which dominated for the first one hundred years of the nation's history.
Southern Pacific News Bureau/AP Images

32. Amending the National-State Relationship
3.3
Amending the National-State Relationship
Sixteenth Amendment
Money is power
Seventeenth Amendment (1913)
Direct election of senators
The Sixteenth Amendment gave Congress the power to levy and collect taxes on incomes. Money is power, so the new revenues the federal government generated greatly enhanced its ability to enter policy areas in which it formerly had few funds to spend.
Before the Seventeenth Amendment, senators were elected by state legislatures. This amendment allowed citizens of the states to directly elect their senators. With senators no longer directly accountable to the state legislatures, states lost their principal protectors in Congress.

33. 3.3 The theory that states can refuse
to abide by federal laws violates what clause of the Constitution?
Supremacy clause
Necessary and Proper clause
First Amendment
Full Faith and Credit clause
What have you learned about the relationship between the states and the federal government? Please choose the correct answer to the following question.

34. 3.3 The theory that states can refuse
to abide by federal laws violates what clause of the Constitution?
Supremacy clause
Necessary and Proper clause
First Amendment
Full Faith and Credit clause
The supremacy clause states that when there is a conflict between national and state laws, the national law is supreme. Federal laws take precedence over state laws.