1. Chapter Three
Federalism

2. Chapter Objectives
Explain the difference between federal and centralized systems of government, and give examples of each.
Show how competing political interests at the Constitutional Convention led to the adoption of a federal system that was not clearly defined.
Like a teakettle, relieving pressure especially for minority interests
Outline the ways in which national and state powers have been interpreted by the courts.
McCullough v. Maryland, Wicker v. Fillburn, Concept of selective incorporation
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3. Distinguish between categorical grants and block grants.
Why have federal grants-in-aid to the states been politically popular? What have proven to be their pitfalls?
Distinguish between categorical grants and block grants.
Distinguish between mandates and conditions of aid with respect to federal grant programs to states and localities.
To what extent have federal grants to the states created uniform national policies comparable to those of centralized governments.
The “devolution revolution.” What are the implications for citizens as taxpayers and as clients of government programs?
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4. 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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5. Figure 3.1: Lines of Power in Three Systems of Government
Insert figure 3.1, but just the drawing of the federal system (the one in the middle)
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6. Figure 3.1: Lines of Power in Three Systems of Government
Insert figure 3.1, but just the drawing of the federal system (the one in the middle)
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7. Figure 3.1: Lines of Power in Three Systems of Government
Insert figure 3.1, but just the drawing of the federal system (the one in the middle)
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8. Positives and Negatives of Federalism
Negative view: Federalism blocks progress and protects powerful local interests
Positive view: Federalism 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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9. Federalism: A Bold New Plan
THEME A: WHO GOVERNS WHAT?
FEDERALISM AND CONSTITUTIONAL LAW
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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10. McCulloch v. Maryland PBS: McCullough v. Maryland
Could Congress charter a national bank?
Yes, even though this power is not explicitly in the Constitution
IMPLIED POWERS (Whatever is “necessary and proper”)
Could states tax the national bank?
No, because “the power to tax is the power to destroy”
NATIONAL SUPREMACY (states can’t interfere with constitutional activities of federal gov’t)
Nullification
Does the federal gov’t have the right to declare state laws unconstitutional? Yes. (14th Amendment)
Settled by the Civil War.
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11. Wicker v. Filburn Challenge to the Agricultural Adjustment Act of 1938
Stabilize price of wheat on the international market
Court unanimously ruled that ability to control prices was part of the powers of Congress under the Commerce Clause
Commerce Clause not challenged for another 60 years (U.S. v. Lopez, 1995)
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12. Federalism Over Time
Dual federalism: Both national and state governments are supreme in their own spheres, which should be kept separate
Particular state issues: law enforcement and education
Hard to make distinctions between state and federal spheres; distinctions between them were blurred
But Supreme Court has strengthened states’ rights in several recent cases
US v Lopez--guns in schools
US v Morrison--Violence Against Women Act
Printz v. US--background checks on gun purchasers
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13. THEME A: DISCUSSION QUESTIONS
Historically power has flowed to the central government. What reasons exist for the states to continue exercising independent power? Given the Supreme Court’s decision in McCulloch, what prevents the central government from assuming legal authority over any area of public policy?
Why doesn’t the federal government always intervene when states defy its authority?
Certain areas in Nevada permit prostitution, nine states have legalized the use of marijuana for “medical purposes”; Massachusetts has legalized same-sex marriage. Could the federal government legally intervene to forbid such practices in these states? Explain why or why not?
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14. WHO GOVERNS NOW? THE CONTEMPORARY POLITICS OF FEDERALISM
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15. How Intergovernmental Revenue Looked: 1787-1935
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16. How Intergovernmental Revenue Looks Today
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17. Grants in Aid: “Fiscal” Federalism
Dramatically increased in scope in 20th century (especially 1960s)
Began with land grants
Land Grant Universities
Grants were a way for federal government to circumvent strict constructionist reading of federal power.
Grants were attractive to state officials for various reasons
Required broad congressional coalitions with wide dispersion of funds, because every state had incentive to seek grant money
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18. Fiscal Federalism
Definition: The pattern of spending, taxing, and providing grants in the federal system
Cornerstone of national gov’t’s relations with state and local Governments
Federal Dollars:
$300 billion in grants every year
“Universalism”: Something for everyone
Mandates:
“Strings” attached to federal money
“Unfunded”: requirements on state and local gov’t, but no money
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19. Budget of the U.S. Government, Fiscal Year 2005, table 12.2.
Figure 3.2: The Changing Purpose of Federal Grants to State and Local Governments Why the change?
Insert figure 3.2
Budget of the U.S. Government, Fiscal Year 2005, table 12.2.
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21. Figure 3.3: Federal Grants to State and Local Governments, 1984-2004
Insert figure 3.3
Budget of the U.S. Government, Fiscal Year 2002, Historical Tables, table 6.1, and Budget of the U.S. Government, Fiscal Year 2005, table 12.1.
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22. Fiscal Federalism in the United States
intergovernmental grants: Payments from one level of government to another. 22
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24. Categorical Grants v. Revenue Sharing
Categorical grants for specific purposes defined by federal law; often require local matching funds
Block grants (sometimes called special revenue sharing or broad-based aid) devoted to general purposes with few restrictions—states preferred block to categorical grants
Revenue sharing (sometimes called general revenue sharing) requires no matching funds and can be spent on almost any governmental purpose
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25. Categorical Grants Given by gov’t for specific purposes
Often require matching funds
Examples: Medicaid, AFDC (welfare)
“Cross-over sanctions”
Federal highway funds
“Cross-cutting requirements”
Must extend to all federally-funded activities
States complain about restrictions
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26. Block Grants “New Federalism” (Reagan)
Combine several categorical grants into one
Give Congress less control over how money is used
Can be victims of “creeping categorization”
Example: shift from AFDC to TANF
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27. Federal Aid and Federal Control
Conditions of aid: rules that state what governments must do if they wish to receive grant money
Mandates: federal rules that states or localities must obey, generally have little or nothing to do with federal aid
Civil rights
Environmental protection
Example: Americans with Disabilities Act (1990) (an “unfunded” mandate)
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28. The Devolution Revolution
Devolution initiatives returned program management to the states, with some federal guidelines, but there is no guarantee of federal support
Block grants fund entitlements
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29. The Devolution Revolution
Devolution proponents harbor a deep-seated ideological mistrust of federal government and believe that state governments are more responsive to the people
Deficit politics encouraged devolution
Devolution is supported by public opinion, but the strength of that support is uncertain
Case Study: AFDC to TANF (Welfare)
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30. Regulated Federalism Instituted by Bush Administration
“No Child Left Behind” (NCLB)
Bush criticized for abandoning conservative principles
Prescription drug benefits for Medicare bloated costs
Return to Federal control caused by 9/11 and Hurricane Katrina as well
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31. Congress and Federalism: Will we become a completely centralized nation?
Members of Congress represent conflicting constituencies: “all politics is local”
The erosion of parties and “linkage institutions” increases political competition
Americans differ in the extent to which we like federal versus local decisions
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32. THEME B: DISCUSSION QUESTIONS
Does the system of grant-in-aid upset the balance of federalism? Do grant programs enable Congress to do what it pleases by bribing states into compliance? Or do these programs merely increase the likelihood of national policy uniformity? What would be the consequence if a state refused federal grant money?
To what extent have interest groups produced grants-in-aid, and to what extent have grants-in-aid produced interest groups? Who constitutes a governmental lobby?
How and why do conservatives and liberals differ over giving aid to the states without conditions?
Why can’t federal agencies attack complex problems by producing and implementing a coherent systematic policy? Why don’t (can’t) federal bureaucrats issue orders where necessary?
Does the recent push toward devolution give states too much power?
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33. Issues connected to federalism
Gay Marriage
Medicinal Marijuana
Civil Rights
Education
Bush v. Gore
Electoral College
Drinking Age Debate (60 Minutes)
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