1. 3
The Federal System
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.

2. 3
Learning Objectives
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.
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
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 governmental policies
3.5
Explore the role of the judiciary as arbiter of federal–state conflicts
3.6

5. Roots of the Federal System
3.1
Roots of the Federal System
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.
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

6. National Powers Under the Constitution
3.1
National Powers Under the Constitution
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
and 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.
Enumerated powers
Coin money
Conduct foreign relations
Provide for army and navy
Declare war
Collect duties and taxes
Necessary and proper clause (elastic)
Enact laws for exercising enumerated powers
Implied powers
Supremacy clause

7. 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.

8. State Powers Under the Constitution
3.1
State Powers Under the Constitution
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.
State powers not enumerated
Tenth Amendment
Reserved powers

9. Concurrent Powers Under the Constitution
3.1
Concurrent Powers Under the Constitution
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.
Overlapping powers
Power to tax
Borrow money
Establish courts
Charter banks
Spend money for general welfare

10. 3.1
FIGURE 3.2: How is governmental power distributed in the federal system?
The Constitution divides power between the national and state governments. It enumerates the powers of the national government, while many state powers are in the reserved powers clause of the Tenth Amendment. The national and state governments also share some powers, known as concurrent powers.

11. Powers Denied Under the Constitution
3.1
Powers Denied Under the Constitution
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.
No state favoritism
No titles of nobility
Bills of attainder
Ex post facto laws

12. Interstate Relations Under the Constitution
3.1
Interstate Relations Under the Constitution
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.
Supreme Court settles disputes
Full faith and credit clause
Privileges and immunities clause
Extradition clause
Interstate compacts

13. 3.1 FIGURE 3.3: How many governments exist in the United States?
More than 87,000 governments exist in the United States. Most of these governments are found at the local level, and are divided between municipal governments, town councils, and special districts, such as school districts. The most common form of government is the special district.

14. 3.1
3.1 What is the source of
governmental authority in the U.S. federal system?
What have we learned about how power is divided among governments in the United States? Please answer the following question.
The states
The people
The president
The federal legislature (Congress)

15. 3.1
3.1 What is the source of
governmental authority in the U.S. federal system?
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.
The states
The people
The president
The federal legislature (Congress)

16. Federalism and the Marshall Court
3.2
Federalism and the Marshall Court
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.
Defining National Power: McCulloch v. Maryland (1819)
Affirming National Power: Gibbons v. Ogden (1824)
Limiting the Bill of Rights: Barron v. Baltimore (1833)

17. Defining National Power: McCulloch v. Maryland (1819)
3.2
Defining National Power: McCulloch v. Maryland (1819)
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.
First Court decision to define national and state government relationship
Could Congress charter a bank?
Could states tax it?

18. Affirming National Power: Gibbons v. Ogden (1824)
3.2
Affirming National Power: Gibbons v. Ogden (1824)
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.
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

19. Limiting the Bill of Rights: Barron v. Baltimore (1833)
3.2
Limiting the Bill of Rights: Barron v. Baltimore (1833)
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. The city, not the federal government, was responsible for the dirt, so Barron had no recourse.
Due process clause
Guaranteed by Fifth Amendment
Action by state, not federal, government caused damages
Federal government not at fault for state actions

20. 3.2 Which Supreme Court cases
restricted the powers of the national government?
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.
Barron v. Baltimore (1833)
McCulloch v. Maryland (1819)
Gibbons v. Ogden (1824)
None of the above

21. 3.2 Which Supreme Court cases
restricted the powers of the national government?
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.
Barron v. Baltimore (1833)
McCulloch v. Maryland (1819)
Gibbons v. Ogden (1824)
None of the above

22. 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, or legally invalid.
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 invalid
Alien and Sedition Acts (1798)
Unconstitutional
“Tariff of Abominations” (1828)
Southern states use nullification to resist anti-slavery laws

23. States’ Rights and the Dred Scott Decision
3.3
States’ Rights and the Dred Scott Decision
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.
Dred Scott v. Sandford (1857)
Slaves were property, not citizens
Congress could not ban slavery in new territories
Enhanced states’ power

24. Reconstruction and the Transformation of Dual Federalism
3.3
Reconstruction and the Transformation of Dual Federalism
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.
Nullification, dual federalism destroyed by Civil War
Reconstruction
New state constitutions
Supreme Court limits state power
Monopolies outlawed

25. 3.3
How did the relationship between state and federal governments change after the Civil War?
The building of the intercontinental railroad gave the national government a greater role to play. Dual federalism was doomed.

26. Amending the National-State Relationship
3.3
Amending the National-State Relationship
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.
Sixteenth Amendment
Money is power
Seventeenth Amendment (1913)
Direct election of senators

27. 3.3 The theory that states can refuse
to abide by federal laws violates what clause of the Constitution?
What have you learned about the relationship between the states and the federal government? Please choose the correct answer to the following question.
Supremacy clause
Necessary and Proper clause
First Amendment
Full Faith and Credit clause

28. 3.3 The theory that states can refuse
to abide by federal laws violates what clause of the Constitution?
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.
Supremacy clause
Necessary and Proper clause
First Amendment
Full Faith and Credit clause

29. Cooperative Federalism: Growth of National Government
3.4
Cooperative Federalism: Growth of National Government
The notion of equally powerful but separate national and state governments ended with the Great Depression. Franklin D. Roosevelt’s New Deal ushered in an era of cooperative federalism, in which the powers of the national, state, and local governments became more integrated, working together to solve shared problems.
Before the 1930s, the federal system at each level or layer of government— national, state, and local—had clearly defined powers and responsibilities. Cooperative federalism was more like a marble cake than a layer cake. As we will see in this section, relations among the national, state, and local governments were so intertwined that it was hard to tell where each one began and ended.
Cooperative Federalism
Marble cake versus layer cake
Need for National Action Arises: The New Deal

30. Need for National Action Arises: The New Deal
3.4
Need for National Action Arises: The New Deal
To combat severe problems facing the nation in the Great Depression, President Franklin D. Roosevelt (FDR) pushed through legislation, collectively called the New Deal. To find national solutions to the Depression, which was affecting citizens of every state in the union, the national government exercised unprecedented authority.
New Deal programs forced all levels of government to work cooperatively with one another. Congress wanted to bypass state legislatures, which often underrepresented urban interests, and so local governments became more important players in national politics.
When politicians challenged the constitutionality of the New Deal programs, the Supreme court at first sided with them. In response, FDR threatened to increase the number of justices and the Court came around.
Great Depression
New Deal programs increased federal authority
States could not solve these problems on their own
Local government involvement
Constitutional challenges

31. 3.4 What do we call the type of
federalism that developed in the 1930s?
How did federalism change in the 1930s? Please answer this multiple choice question.
New Deal federalism
Progressive federalism
Layer cake federalism
Cooperative federalism

32. 3.4 What do we call the type of
federalism that developed in the 1930s?
Cooperative federalism stressed shared federal–state responsibilities for dealing with the economic and social problems brought on by the Great Depression. Unlike the separation of powers under dual federalism, powers were shared. But states began to take a secondary role.
New Deal federalism
Progressive federalism
Layer cake federalism
Cooperative federalism

33. Federal Grants to State and Local Governments
3.5
Federal Grants to State and Local Governments
The federal government provides money to states in a number of ways, including categorical grants, block grants, and programmatic requests. When the federal government creates programs without providing sufficient funds to the states to implement them, the states object. These policies are called unfunded mandates.
In this section, we will discuss all three of these types of federal grants, as well as unfunded mandates.
Categorical Grants
Block Grants
Programmatic Requests

34. Categorical Grants 3.5 Grants serve three purposes
Roosevelt’s New Deal programs increased the flow of federal dollars to the states and made the national government a major player in domestic policy. President Johnson increased government funding to states for his Great Society programs, intended to combat poverty. He used categorical grants to persuade cities and states to fulfill his programs.
Grants provide state and local governments with additional funds, set national standards for policy priorities, such as clean air and water, and attempt to financially equalize rich and poor states and localities.
Categorical grants must be used for a specific purpose. The funding given to state and local governments is a means of persuading governments to adopt the policy objectives of the national government.
Grants serve three purposes
Provide funds
Address national problems like clean air
Redistribute funds between rich and poor states
Categorical grants are for specific purpose

35. Block Grants 3.5 Block grants less restrictive
In the 1980s, President Reagan advanced what he called New Federalism, a return of power to the states. This became known as the devolution revolution.
Instead of categorical grants, he favored block grants, which are less restrictive in how the money can be spent. Block grants are usually allocated for general policy areas, such as education and health care, rather than specific programs. Block grants give states more discretion in how to spend federal funds.
Block grants less restrictive
Give states more discretion in spending funds
Devolution revolution

36. Unfunded Mandates 3.5 No Child Left Behind (2001)
Unfunded mandates, however, are never popular. Unfunded mandates are federal laws that states must implement without additional federal funding, such as the infamous No Child Left Behind Act of 2001.
The Unfunded Mandates Reform Act was passed to prevent Congress from forcing to states to pay for federal programs.
Activity: Use a think/pair/share exercise to have students consider the following question: Was devolution effective in returning power to the states? Discuss the problem that with power comes accountability and financial responsibility. States may want power to make policies, but do they want to pay for them? Have students consider No Child Left Behind to illustrate their arguments.
No Child Left Behind (2001)
Unfunded Mandates Reform Act of 1995

37. 3.5
Who supported scaling back the federal government and increasing the use of block grants?
Republicans supported devolution as a way to return power to the states and limit federal government power. Newt Gingrich, who served as Speaker of the House during the 1990s, set forth a Republican “Contract with America.” The Contract was a program of government reform supported by many Republican candidates in 1994.

38. Programmatic Requests
3.5
Programmatic Requests
Programmatic requests are federal funds designated for special projects within a state or congressional district. They are informally known as earmarks.
Earmarks are not competitively awarded, and have thus become very controversial owing to the use of paid political lobbyists who try to secure federal funds for their clients, which might be states, cities, universities, or nonprofit groups. Members of Congress also attempt to secure these funds to “bring home the bacon.”
Funds earmarked for specific projects within states
Secured by lobbyists or members of Congress for their districts
Bringing the pork back home

39. 3.5 How do block grants differ from categorical grants?
The different types of grants can be confusing. Before we begin the next section of the chapter, let’s answer a brief question to assess your knowledge of different types of grants.
They provide less money to states.
They provide more money to states.
They have fewer restrictions on how they are spent
They have more restrictions on how they are spent

40. 3.5 How do block grants differ from categorical grants?
Block grants require states to spend the money in certain policy areas, but it is up to the states to determine how to use the money.
They provide less money to states.
They provide more money to states.
They have fewer restrictions on how they are spent
They have more restrictions on how they are spent

41. Judicial Federalism 3.6 The Rehnquist Court The Roberts Court
This section will show us why the role of the Supreme Court of the United States in determining the parameters of federalism cannot be overstated. Justices decide cases that determine which government—federal or state—is supreme in a given policy area.
The Rehnquist Court
The Roberts Court

42. The Rehnquist Court 3.6 Appointed by Reagan
From the New Deal until the 1980s, the Supreme Court’s decisions generally favored the national government’s authority at the expense of the states.
Beginning in the late 1980s, however, the Court’s stance on federal government power changed. Ronald Reagan appointed new justices who were committed to the notion of states’ rights. They rolled back federal intervention in matters that many Republicans believed were state responsibilities.
For example, in the case of U.S. v. Lopez, the Court ruled that Congress could not use the interstate commerce law to ban hand guns within 1,000 feet of a schools. Gun control laws were a state, not a federal issue, according to the Rehnquist Court.
Appointed by Reagan
Committed to states’ rights
Rolled back federal authority
U.S. v. Lopez (1995)

43. The Roberts Court 3.6 Has decided with federal government Immigration
Conservative Chief Justice John Roberts was appointed by President George W. Bush to replace Rehnquist. Bush also appointed conservative associate justice Samuel Alito. President Obama has appointed two liberal justices so far, Sonya Sotomayor and Elena Kagan.
Observers were surprised when the conservative-dominated Court sided with the federal government on issues of immigration and Obama’s health care reform.
What does the future hold? We will have to wait and see. A lot depends upon which, if any, justices retire during Obama’s second term.
Has decided with federal government
Immigration
Health care reform

44. 3.6 From the New Deal until the
1980s, the attitude of the Court toward
federal authority was
What have you learned about the Supreme Court’s impact on federalism? Please choose the correct answer to the following question.
To expand it
To limit it
To expand it in one or two areas only
To keep the balance as the Framers intended in the 1780s

45. 3.6 From the New Deal until the
1980s, the attitude of the Court toward
federal authority was
The Court’s support for FDR’s New Deal programs was the beginning of its expansive stance on federal power.
To expand it
To limit it
To expand it in one or two areas only
To keep the balance as the Framers intended in the 1780s