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3 Federalism © Ron Chapple/Corbis Learning Objectives By the end of this chapter, you should be able to• Analyze the division of power and authority between the states and the national government.

• Describe and interpret the concept of federalism.

• Describe contemporary federalism as intergovernmental relations.

• Outline the historical phases of federalism.

• Analyze the meaning of federalism today.

• Describe the future of federalism. fin82797_03_c03_053-074.indd 53 3/24/16 1:39 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.1 Federal Division of Power and Authority In April 2010, Governor Jan Brewer of Arizona signed a statute requiring state and local police to enforce the existing federal immigration law. The statute was passed because state legislators and the Arizona governor believed it was time to reduce the number of Mexican immigrants illegally crossing the U.S. border into Arizona. While federal law requires that immigrants carry proof of either citizenship or documents proving their right to be in the United States, under the new state law, officers who suspect someone of being in the United States illegally can demand to see the appropriate papers and, if warranted, make an arrest.

Federal officials objected to the new Arizona law because they maintained that only the fed- eral government may create immigration policy, and Arizona has no business interfering with federal authority. A federal district court upheld some but not all sections of the state statute. The state of Arizona appealed the ruling, and the case was later heard by the U.S.

Supreme Court. At issue was the rightful power and authority of state governments in rela - tionship to federal authority. In June 2012, the U.S. Supreme Court ruled in Arizona v. United States in a 5–3 decision (Associate Justice Elena Kagan took no part in the case) to uphold the state-level requirement that state and local police could check immigration status during law enforcement stops. The U.S. Supreme Court struck down three other provisions of the statute because they violated the U.S. Constitution’s Supremacy Clause requiring that state laws may not conflict with national laws.

This case nicely illustrates several questions about the meaning of federalism, a term that describes the U.S. system of dividing power and authority, derived from the people, between the national and state governments. Does Arizona have the authority to enact the statute that it did, or does federal authority over immigration limit or deny states the right to enact stat - utes where state interests overlap with federal authority? Because Arizona shares its south - ern border with Mexico, the governor argued, Arizona had the right to enact state-level immi - gration legislation. The Supreme Court sided with Arizona; Arizona’s statute did not violate the Supremacy Clause.

3.1 Federal Division of Power and Authority The Constitution was written in very general language, which has resulted in ambiguity about where national power and authority end and state power and authority begin, and vice versa.

Figure 3.1 illustrates how state and national governments both have their own powers but also share the authority to perform some of the same functions. In other words, the Constitu - tion has a built-in tension between the national government and the states. That tension has long been part of the American experience, and it continues to be the source of political conflict. Figure 3.1: Chart of U.S. federalism This figure illustrates the separate and shared powers of the national and state governments.

© 2013 Mr. Kindred’s U.S. History Blog. fin82797_03_c03_053-074.indd 54 3/24/16 1:39 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.1 Federal Division of Power and Authority National Power The U.S. Constitution sets up a system where national power is shared with state govern- ments. This is called a federal system. The national government is part of a federal system.

When addressing the national government, one is referring specifically to the highest level of government in a federal system. At the same time, the phrase “federal government” is used interchangeably with “national government” when referring to the highest level of govern - ment in a federal system. The two principal bases for national power are found in the Com- merce Clause and the Supremacy Clause of the Constitution. The Commerce Clause, found in Article I, Section 8, gives Congress the power to “ regulate Commerce with Foreign Nations, and among the several states,” which allows the national government to regulate various activities related to interstate commerce. For example, the national government may create environ - mental regulations because pollution crosses state lines.

The Supremacy Clause gives the Constitution and national laws authority over the states:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to be Contrary notwithstanding.

The Supremacy Clause addresses those times when state or local laws conflict with national laws or the U.S. Constitution. In these instances, the Constitution and the national laws prevail. In April 2010, Governor Jan Brewer of Arizona signed a statute requiring state and local police to enforce the existing federal immigration law. The statute was passed because state legislators and the Arizona governor believed it was time to reduce the number of Mexican immigrants illegally crossing the U.S. border into Arizona. While federal law requires that immigrants carry proof of either citizenship or documents proving their right to be in the United States, under the new state law, officers who suspect someone of being in the United States illegally can demand to see the appropriate papers and, if warranted, make an arrest.

Federal officials objected to the new Arizona law because they maintained that only the fed - eral government may create immigration policy, and Arizona has no business interfering with federal authority. A federal district court upheld some but not all sections of the state statute. The state of Arizona appealed the ruling, and the case was later heard by the U.S.

© 2013 Mr. Kindred’s U.S. History Blog. fin82797_03_c03_053-074.indd 55 3/24/16 1:39 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.1 Federal Division of Power and Authority State Power The 10 th Amendment states that all powers not delegated, or specifically given, to the federal government become powers held by the states. Put differently, if the authority to do something is not expressly given to the national government, that power falls to the states: “ 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 .” Fittingly, this is known as the “reserved powers” clause. In contrast, federal powers are listed, or enumerated, in Article I, Section 8 of the U.S.

Constitution. Many argue that these powers may be interpreted in a way that expands them beyond those listed in Article I, Section 8 through the Necessary and Proper Clause found at the end of Article I, Section 9. This means that state powers may be limited by the national govern - ment even if those federal powers are not enumerated in Article I, Section 8.

As we have seen, the defining fea - ture of the American federal sys - tem is that states share power and authority with the national govern- ment. In fact, the Bill of Rights was intended to protect the civil liber - ties of the people and state sov - ereignty by imposing limitations on national authority. However, in 1925, the U.S. Supreme Court began applying key provisions of the 14 th Amendment to the states and inter - preting some state laws to be in violation of the Bill of Rights. These interpretations have expanded the power of the national government while limiting state power.

Federal–state relations often hinge on the tension between these national and state bases of power. Consider the national No Child Left Behind Act (2001). In an effort to improve students’ educational outcomes, this law limits states in how they regulate education, assess student learning, and respond to student learning gains among other con- cerns, even though public education has been provided and regulated by the states for more than 200 years. Regulating education has long been considered to be a reserved power under the 10 th Amendment: Absent provisions that both grant express (or enumerated) powers to Congress and withhold them from the states, the 10 th Amendment means that it is assumed that the states are given those powers unless those powers are given specifically to Congress. State Sovereignty Versus National Unity What are the limits of states’ rights? The answer is not clear, as the Supremacy Clause, the 10 th Amendment, and the 14 th Amendment all speak to national and state power. When a state’s interest interferes with a national interest, there are limits placed on state power.

The language of the 10 th Amendment appears to limit national authority unless that national authority is spelled out in the Constitution. According to this view, if the states are sovereign, © Reuters/Corbis The 10 th Amendment states that all powers not del- egated, or specifically given, to the federal government become powers held by the states. Put differently, if the authority to do something is not expressly given to the national government, that power falls to the states. fin82797_03_c03_053-074.indd 56 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.1 Federal Division of Power and Authority there can be no national authority that interferes with that sovereignty. And yet, if there is no national authority to limit state sovereignty, then the United States cannot be a united nation.

Recall from the discussion in Chapter 2 that there was great concern among states’ rights advo- cates that the states might lose their sovereignty to the national government following consti - tutional ratification. This was apparent with the issue of representation and the division between free states and slave states when the Constitution was being designed. James Madison proposed that the Three-Fifths Clause be included in the Constitution to calm fears that South- ern states would become more powerful than others when counting slaves as whole persons for the purposes of representation. Slave states were concerned that as more territories were admitted to the union as free states, power among slave states would become diluted. Beyond that concern, if the number of free states admitted to the union were to far outnumber slave states, then the free states might support a constitutional amendment outlawing slavery.

John C. Calhoun (1782–1850), a South Caro- lina statesman, wrote a famous pamphlet titled A Disquisition on Government , which was published shortly after his death. Cal - houn expressed concern that over time the Southern states would be outnumbered. To preserve state sovereignty, he proposed two mechanisms to assert states’ rights: nullifi- cation and interposition. Both mechanisms would allow a state to effectively decide that a federal action does not apply to it.

Nullification would grant veto power to each state, similar to that held by the president.

Calhoun suggested that for a bill to become law, a majority of each state legislature, in addition to a majority of both houses of Con - gress, would have to pass it. In other words, if the legislature of just one state voted against the measure, it would not become law.

Nullification would also allow any state to veto anti-slavery legislation. For example, the states would be able to veto the Missouri Compromise (1820), which allowed territories above the 368 30’ north parallel to be admitted as free states and those below it to be admitted as slave states.

Given that each state has different interests and priorities, the likely consequence of nullifica - tion would be to effectively paralyze and limit the authority of the national government. Nul - lification would make the national government under the U.S. Constitution no more powerful than it was under the Articles of Confederation.

Interposition was a less drastic proposal, but it too would have meant a weakened federal system. With interposition, a state would have the right to oppose federal actions that it con - sidered unconstitutional. Interposition would allow a state to assert its sovereignty by placing a barrier between itself and the national government and deciding that a national law passed by both houses of Congress and signed by the president does not apply within that state’s © Corbis South Carolina statesman John C. Calhoun (1782–1850) was a strong advocate of states’ rights. fin82797_03_c03_053-074.indd 57 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.2 Understanding Federalism borders. The state would, in effect, exempt itself from following that national law. Interposi- tion would have allowed free states admitted above the 368 30’ north parallel to declare that the prohibition of slavery did not apply to them.

Neither nullification nor interposition ever took firm root, although the fact that the two ideas were even suggested demonstrates the tensions organized around state and national sover- eignty. Calhoun’s argument highlights the tensions built into the U.S. Constitution.

3.2 Understanding Federalism The last chapter outlined how separation of powers serves as the cornerstone of the U.S. Con- stitution. Federalism is another cornerstone. As suggested by its preamble, which begins with “We the People,” the Constitution declares that sovereignty, or the ultimate authority to gov - ern, rests with the people. Through the Constitution, the people distribute their sovereignty to the units of government (national and state) in a federal system.

The concept of federalism can be interpreted in multiple ways. For example, federalism might suggest that the national government has supreme and equal authority over all 50 states.

Alternatively, federalism can mean that the national government and states enjoy equal sov - ereignty. The second interpretation was the dominant approach taken in the United States from the Constitutional Convention up until the 1930s. During this period, the national gov - ernment could not tell the states what to do, nor could the national government dominate the states. Rather, the states and the national government cooperated. Beginning in the 1930s, the federal government became more involved in domestic policy functions, and federalism came to be understood as a relationship where the states were subordinate to the supreme power and authority of the national government. This understanding, however, is not abso - lute; rather, federalism should be viewed on a scale where strict states’ rights are found on one end while absolute national authority is found on the other end. Depending on the pub - lic’s needs, a pendulum swings back and forth between the two ends of the scale.

The Framers’ Vision The idea of coequal state and national sovereignty lies at the core of the American consti - tutional system. Recall from Chapter 2 that the Constitution is a contract between the states and the national government.

The 13 original states agreed to enter into that contract with the understanding that they would not surrender their sov - ereignty. The phrase “We the People ,” which establishes the principle of popular sover - eignty, also refers to the people Robert Harding/SuperStock By establishing a federal system, the Framers rejected the concentration of power and authority in the hands of a central government. fin82797_03_c03_053-074.indd 58 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.2 Understanding Federalism of the original 13 states coming together, thus maintaining the concept of state sovereignty.

Providing a common defense, as noted in the Preamble, required state governments to give up their power to a strong national government.

The Framers believed that a federal system would secure individual liberties. The division of power between a sovereign national government and individual sovereign states would distribute power while the separation of powers among three branches of government would ensure that citizen rights and liberties would not be easily violated. By establishing a federal system, the Framers rejected the concentration of power and authority in the hands of a cen- tral government. Each phase of federalism is discussed in detail later in this chapter.

Contemporary Federalism as Intergovernmental Relations (IGR) If the Framers were alive today, they might not recognize the federal system, because they conceived of it as a formal division of power and authority between the states and the national government. Today, federalism is thought of less in terms of formal divisions and more in terms of working partnerships between the states and the national government. In fact, when we talk about federalism today, we talk in terms of intergovernmental relations (IGR), whereby the states and the national government must work together to achieve a common public purpose.

The working relationship is not always easy or smooth. The tension between state and national sovereignty continues, although states must work with the national government in order to fulfill citizen needs. Unless it is part of its enumerated constitutional powers found in Article I, Section 8, the national government should not direct state actions. The national government lacks authority other than to use the power of the purse to enforce compliance.

Consider the vignette that opened this chapter.

The federal government is obligated to enforce immigration policy by patrolling the borders.

Grant-in-Aid Despite the built-in tension, the national gov - ernment has several tools at its disposal to help ensure cooperation from the states. One tool is grant-in-aid, or sums of money the national government gives to the state or local governments to do something. If the national government gives the state of Colorado money to repair highways, for instance, that money is usually considered to be a grant-in-aid. Not all grants-in-aid are the same. There are two basic types: categorical grants and block grants. Associated Press/Roger Alford A categorical grant is money given to a state by the federal government for a specific purpose. fin82797_03_c03_053-074.indd 59 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.2 Understanding Federalism A categorical grant is money given to a state by the federal government for a specific pur- pose or function, such as to build or repair roads. Categorical grants allow no flexibility or discretion. Through categorical grants, the federal government is able to wield influence over both states and localities. By contrast, block grants offer states more flexibility than categori- cal grants do. Whereas the categorical grant is single purpose, the block grant is multipur - pose. A block grant is actually a group of several categorical grants that are related to one another. Within the block are several separate programs, and the recipient of the grant can choose which programs to fund and can move money around from one program to another.

Preemption The national government can seek state compliance through the courts. A court that issues a judgment against a state has no real enforcement power, although states may comply with judgments against them if only because they have been ruled against. At the same time, the national government may utilize preemption, which is the federal government’s right to prevent state and local governments from enforcing their own laws because those state and local laws conflict with the Supremacy Clause. Either scenario is less likely today than it was in the early republic. A tradition of respecting and abiding by judgments of courts has evolved over time. Use of Federal Marshals The national government may, though not frequently, use troops as a last resort to enforce court decisions against state governments. As an example, the Supreme Court held in Brown v. Board of Education (1954) that Kansas’ racial segregation of the schools violated 14 th Amendment equal protection guarantees and was therefore unconstitutional. A year later, the Court ruled that schools nationwide would have to integrate, which meant that there could no lon - ger be separate schools for White and Black students.

Many states, particularly in the South, refused to comply with these Supreme Court rulings. One conflict came to a head in 1957 in Little Rock, Arkansas. Arkansas Governor Orval Faubus refused to comply with the U.S. Supreme Court’s 1954 decision in Brown v. Board of Education mandating school desegregation in Little Rock. Instead, he had the Arkansas © Bettmann/Corbis In 1957, President Eisenhower used federalized troops to force the Little Rock, Arkansas, schools to comply with the Supreme Court’s ruling in Brown v.

Board of Education. Here, the troops are moving pro- testors away from the high school. fin82797_03_c03_053-074.indd 60 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.3 Historical Phases of Federalism National Guard block nine Black students from entering a local Little Rock high school. Presi- dent Dwight D. Eisenhower “federalized” the Arkansas National Guard, which in effect shifted their command from the governor to the president. President Eisenhower then ordered the Arkansas National Guard to escort and protect the nine Black students integrating Central High School. Such events can add tension to the federal–state relationship.

3.3 Historical Phases of Federalism Like the U.S. Constitution and core American values, approaches to federalism have changed over time. From the Dual Federalism (1789 to the 1930s) period through the Cooperative Federalism (1930s to 1960s) period (which included Creative Federalism [mid-1960s]), the balance of power shifted from the states to the national government. New Federalism is char - acterized by an attempt to rebalance the distribution of power between the states and the federal government in the 1970s and 1980s.

Dual Federalism, 1789–1933 Dual Federalism dominated between the time of the ratification of the Constitution and 1933, when the national government became more active during the time of the New Deal, a legislative package intended to help Americans suffering during the Great Depression. During the Dual Federalism period, there was a division of labor between the states and the national government. While the national government was responsible for national concerns such as securing borders, defending the nation, and maintaining foreign policy and mail delivery, states were responsible for local law enforcement, education, and maintaining roads and waterways.

Cooperative Federalism, 1933–1960s As the national government assumed more responsibility for domestic pol- icy during the Great Depression, the states were responsible for imple- mentation. This Cooperative Feder- alism phase involved the states and the national government working together to implement public policy, which brought the era of intergov - ernmental relations. © Bettmann/Corbis People line up for food during the Great Depression.

The end of the Great Depression ushered in the era of Cooperative Federalism. fin82797_03_c03_053-074.indd 61 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.3 Historical Phases of Federalism As an example, when Social Security was enacted in 1935, it created a retirement program for senior citizens and public assistance for the poor originally called Aid to Dependent Chil- dren (ADC) (and in the 1960s came to be known as Aid to Families with Dependent Children [AFDC]). The national government created guidelines for implementing ADC and funded it while the states implemented it. States could determine who would be eligible to receive assistance and how much they would receive based on national criteria.

In the Dual Federalism period, the states and the national government operated separately, while under Cooperative Federalism the states and the national government worked together.

Americans now looked to the national government for solutions to their problems largely because the states did not have the resources to address them, although the states also looked to the national government to address their concerns. One result was that the states lost power under Cooperative Federalism.

Creative Federalism, 1963–1969 Creative Federalism began in 1963 with the Johnson administration. Creative Federal - ism represented a shift of power from the states to the federal government through use of grants-in-aid and increased regulation. The national government sought to create new pro - grams through numerous grants-in-aid programs to both states and localities under Creative Federalism.

But Creative Federalism also used crossover sanctions to achieve state compliance. A cross- over sanction occurs when the national government withholds funding in one program area to ensure compliance in other areas. As an example, when Congress passed the Voting Rights Act in 1965 and prohibited racial discrimination in allowing people to vote, many states chose not to enforce it. Using the crossover sanction, the national government threatened to with - hold promised subsidies, such as funding for highway repairs, for states that failed to enforce the act. Subsidies refer to special assistance from the government for a program or project, such as a social program. Initially, there were some strongly segregationist states that were adamantly opposed to allowing African Americans to vote and were thus willing to forfeit highway subsidies. Arguably, the national government could have sent in federal marshals to protect voting rights, but doing so would have heightened the tension between the national government and the states. Crossover sanctions persuaded Southern states to comply with the Voting Rights Act.

New Federalism I, 1972–1980 In response to the growth in grants-in-aid, the Nixon administration introduced New Fed- eralism , which was intended to restore the traditional balance between the states and the national government. The real objective was to cut many of the social programs that had been connected to President Johnson’s domestic policy and anti-poverty programs enacted during the 1960s under Creative Federalism. fin82797_03_c03_053-074.indd 62 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.3 Historical Phases of Federalism Initially, the Nixon administration sought to combine categorical grants into block grants. But Nixon’s New Federalism introduced general rev- enue sharing, which involves the national government giving money to the states without restrictions on how those monies would be spent.

Nixon reasoned that this approach would be politically feasible as, instead of cities applying directly to the national government for categor - ical grants, they could get lump sums to use for themselves. Suburban areas often received more money than central cities did.

New Federalism II, 1982– Present Although states had more discretion under the New Federalism/general revenue sharing arrangement, the balance of power favored the national government. Governors complained that the traditional balance of power between the states and the national government was distorted because the states were limited in determining their spending priorities.

The Reagan administration (1981– 1989) promised to end the big gov - ernment era and restore the balance of power between the states and the national government. As with Nixon before him, Reagan confronted Dem- ocratic majorities in Congress who resisted cutting social programs. The means to reform this system came to be known as New Federalism II, which featured the Great Swap and the Super Trust Fund.

The Great Swap, as proposed, involved the national government trading responsibilities with the states. The national government would maintain responsibility for Medicare (health insurance for the elderly), while states would have responsibility for Medicaid (health insurance for the poor and people with certain disabilities). Until this point, Medicaid was jointly funded by both the national government and the states. © Bettmann/Corbis President Ronald Reagan outlined his version of New Federalism in his 1982 State of the Union address.

The states and federal government would trade some responsibilities. For instance, the states would be responsible for Medicaid and the national govern- ment for Medicare. Associated Press President Richard M. Nixon introduced New Federal- ism. In it, cities applying for federal categorical grants receive monies in a lump sum to allocate to their com- munities as they see fit. fin82797_03_c03_053-074.indd 63 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.3 Historical Phases of Federalism Further, the national government would provide temporary funding for the states’ new responsibilities through a Super Trust Fund, which would be established for almost $30 bil- lion and expire after 4 years. After the funds ran out, states could either discontinue their programs or manage them with state funds.

Reagan reasoned that without national funding, governors would have no choice but to cut Medicaid and other state social programs. Governors initially liked the idea because they would have full discretion over their programs and budgets.

New Federalism II, however, never really emerged as New Federalism I did. States did assume responsibility for Medicaid while the national government maintained responsibility for Medicare. A trust fund was set up, but it was not easily phased out because a big recession set in during the early 1980s and the governors resisted losing federal funds. The states became increasingly dependent on the national government for support, as they could not meet the needs of the people. Figure 3.2 illustrates the rising costs of Medicaid for the federal and state government.

Figure 3.2: State and federal costs of Medicaid With the Great Swap and the Super Trust Fund, President Ronald Reagan switched primary responsibility for Medicaid from the national to the state governments.

Adapted from “Figure 1. Medicaid Enrolling and Spending, FY 1966-FY 2013,” by Medicaid and CHIP Payment and Access Commission (MACPAC), 2014 (https://www.macpac.gov/wp-content/uploads/2015/01/Figure-1.-Medicaid-Enrollment-and-Spending-FY-1966- F Y-2013 .pdf ). fin82797_03_c03_053-074.indd 64 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.4 The Meaning of Federalism Today Unfunded Mandates Arguably, New Federalism paved the way to the era of unfunded mandates. An unfunded mandate works similarly to Creative Federalism as, with unfunded mandates, the federal gov - ernment does not provide the states with needed funding, which forces the states to pay for nationally mandated programs on their own.

As an example, each state provides unemployment benefits that its finances with its respec - tive state unemployment insurance trust funds, into which employers have paid premiums.

Most states provide unemployment benefits for 26 weeks, although during severe recessions the federal government may extend benefits for 13 weeks or more. When Congress votes to extend unemployment benefits, it appropriates money for the additional coverage, but not enough to cover the entire cost. The portion that is left to the states to pay is an unfunded mandate.

Congress passed the Unfunded Mandates Reform Act of 1995, which was intended to limit the number of unfunded mandates imposed upon the states. Under the law, mandates could not be imposed unless federal funding was included in the mandate to help state and local governments fulfill mandate requirements.

3.4 The Meaning of Federalism Today Federalism has come to be understood as intergovernmental relations where the lines that divide national and state sovereignty are less clear than they were in the past. Multiple images help us understand contemporary American federalism.

Layer Cake Theory of Federalism In constitutional terms, the national government interacts with the states and the states interact with their respective local governments. In traditional federalism, there is no interac - tion between the national government and localities. This type of a federalism system is often compared to a layer cake with three layers, one on top of the other. The reality is far more complicated, as both the national government and localities have found ways to bypass the states.

Marble Cake Theory of Federalism Some argue that, because of the constant interaction between the states and the national gov - ernment, the federal system can be thought of as a marble cake rather than a layer cake (see Figure 3.3). In a marble cake, the flavors are integrated and blend into one another. No one flavor stands on its own. fin82797_03_c03_053-074.indd 65 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.4 The Meaning of Federalism Today If we think of the different layers or parts of a layer cake (Dual Federalism) or marble cake (Cooperative Federalism, Creative Federalism) representing different strands of sovereignty and authority, it becomes clear that states cannot function without the national government and the national government cannot function without the states. This was certainly true in the era of Cooperative Federalism. To meet the needs of their citizens, the states needed the assistance of the national government, while the national government needed the assistance of the states to deliver goods and services to the people. Public policy in the form of public programs became a joint effort.

In contemporary federalism, formal divisions between national and state governments are harder to explain. Consider the following examples: With clear divisions, a person committing a state crime such as murder would be tried in state court after the crime had been investi- gated by local police. Meanwhile, if the same person had committed a federal crime, such as terrorism, the crime would be investigated by the Federal Bureau of Investigation (FBI) and tried in federal court. Here, there is a clear distinction between levels of government, like lay - ers of a cake.

With the marble cake, however, it is not always clear who is responsible for what. When terrorists attacked the World Trade Center in New York City on September 11, 2001, there were questions as to who was responsible for the ensuing investigation. Because the attack occurred in New York City, it would normally fall under the jurisdiction of the New York City Police Department. But given the high-profile target, the motivation for the attack, and the great loss of life and destruction, the city needed additional resources, so the New York State Figure 3.3: American federalism The federal system of government can be thought of as similar to a marble cake, because all levels (flavors) are mixed and one level cannot function without the other.

From http://theroledex.wordpress.com/2010/10/17/rigidity-in-the-crime-complex-by-ny-and-ljd/ fin82797_03_c03_053-074.indd 66 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.4 The Meaning of Federalism Today police were called in. The fact that the attack was also an act of terrorism made it a matter of concern for the FBI and the Central Intelligence Agency (CIA).

One might hope that all levels of government would cooperate despite uncertainty over issues of jurisdiction, which speaks to the marble cake nature of the federal system. In most cases, there tends to be great confusion, while in other cases there are too few resources for states to address emergency situations. For instance, when Hurricane Katrina wiped out most of New Orleans in 2005, the state of Louisiana did not have the resources to address the prob- lem. Local and state officials, including the Louisiana National Guard, were needed to evacu- ate some people, rescue others, and prevent looting. The federal government, through the Federal Emergency Management Agency (FEMA), was needed to provide relief and assistance to residents who were displaced from their homes.

Adding to these approaches to federal–state relationships is that there are some powers that are held by both the federal and the state gov- ernments. These powers are called concurrent powers. In these situa- tions, both the federal and the state governments hold specific pow - ers, but that does not always mean that they will be exercised at both levels, nor do the federal and state governments need to work together when using their concurrent pow - ers. For example, the power to tax is held by the federal and by the state governments.

States as Laboratories of Democracy Federalism today is often understood as a tug of war between those seeking more uniform national standards and those seeking more flexibility for the states. The question is often whether the notion of state sovereignty in the 21 st century has any real meaning when the states increasingly rely on the national government to provide them with financial assistance.

Some might argue that the U.S. government should be thought of as a unitary system with a central authority that delegates authority and power to administrative subdivisions. Yet states continue to have a vital role to play. Supreme Court Justice Louis Brandeis (1856–1941) famously observed that states in the federal system are laboratories of democracy—they represent places to experiment with policy before it is tried out on the nation as a whole.

Wisconsin’s welfare-to-work program in the 1990s provides an example. The program required that those receiving public assistance benefits work at least 20 hours a week. Those needing training received it, while those requiring child care to participate also received it. Participants could continue receiving Medicaid. The idea was to transition people from © James Pinsky/U.S. Navy/Corbis The marble cake theory of federalism was exempli- fied in the aftermath of Hurricane Katrina, when the state of Louisiana and the city of New Orleans did not have enough resources to deal with the emergency.

The Federal Emergency Management Agency (FEMA) stepped in to assist residents who were displaced from their homes. fin82797_03_c03_053-074.indd 67 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.4 The Meaning of Federalism Today dependence on welfare to independence in the labor force. As the number of families on wel- fare declined, federal officials and policy planners wondered if the success of the Wisconsin program could be duplicated at the national level.

Following Wisconsin’s example, President Clinton signed a sweeping reform law in 1996 requiring welfare recipients to work in exchange for their benefits. As part of the reform, the national government established a new program called Temporary Assistance for Needy Families (TANF). States received TANF funds in the form of block grants and could distribute the money as they saw fit. At the heart of the reform were the welfare-to-work programs that each state would create. Some states might provide little help in finding employment, while others might provide substantial help for job seekers, including résumé writing, inter - view training, and general skills training. States wanting to reduce their welfare rolls (also a requirement of the law) could find ways to disqualify recipients, which forced them into the labor market and to accept whatever jobs available to them. Wisconsin’s welfare-to-work program is an example of a laboratory of democracy. Clinton’s federal welfare reform pro - gram was democratic because it emerged from grassroots experimentation.

Local Autonomy Within the federal system, local govern - ments are very different from states.

While the Constitution makes no men - tion of local governments, it assumes that municipalities function within, and are governed by, their respective states.

Today, the federalist model extends to local government, and local govern - ments have only as much power and independence as their states want them to have.

Dillon’s Rule Versus Home-Rule Charters The guiding principle regarding local autonomy versus state oversight is known as Dillon’s Rule. In 1868, Iowa Circuit Judge Forrest Dillon expressed this opinion regarding a dispute between the state of Iowa and a city:

Municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so may it destroy. If it may destroy, it may abridge and control.

Cities, in other words, are creatures of the state. Disputes between municipalities and states are decided in favor of the state. Cities have only those powers expressly granted to them by state governments. Associated Press/Richard Drew An example of Dillon’s Rule was the New York City mayor’s plan to reduce traffic congestion by requiring drivers to pay a surcharge when they entered the city. The plan, proposed by the city, required approval by the state legislature. fin82797_03_c03_053-074.indd 68 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 3.5 The Future of Federalism Most cities have home-rule charters, which establish the limits of local authority. A city with a home-rule charter is generally more sovereign than a city without one. Charters are granted by either state legislatures or provisions in state constitutions. Cities without home-rule char- ters are assumed to be governed by Dillon’s Rule, which gives state legislatures much more power over them.

Types of Local Government There are more than 3,000 local governments of different types and with different respon - sibilities in the United States. Each state constitution provides for local entities, including counties, municipalities, and special districts. County governments are generally responsible for record keeping such as births, deaths, and land transfers; the administration of elections including voter registration; construction and maintenance of local and rural roads; zoning; building code enforcement; and the administration of justice. The functions of counties vary from state to state.

Municipalities are incorporated cities, towns, or villages within a county that have their own governing and taxing authority. Some municipalities take up an entire county, such as San Francisco and Jacksonville. Some cities, such as Chicago, are the principal cities in their respective counties (Chicago is in Cook County, Illinois) while others, such as New York City, span several counties. Finally, special districts operate independently of other local govern - ments and are usually established to serve a specific purpose within a geographic region. As such, special districts often have their own taxing authorities.

3.5 The Future of Federalism Questions concerning the future of federalism often focus on whether federalism as it is cur - rently known is really viable. As citizens ask the national government to do more, there would appear to be less of a need for the traditional division of power and authority between the states and the national government. History, particularly where civil rights are concerned, has shown that people cannot rely on the states to protect them. The argument for national authority is that it is necessary to achieve uniformity of standards. If left up to the states, each will do things as it sees fit.

Consider the example of the federal minimum wage. The federal minimum wage was set at $7.25 in July 2009. Without a national uniform standard, one or more states might have mini- mum wages below that standard, or none at all. Uniformity of standards requires a strong cen - tralized authority at the national level, as well as states that will comply with that authority.

There remains a strong rationale for maintaining the federal system. During the late 1800s, Lord James Bryce argued that federalism prevents the rise of despotic governments that would absorb other powers and threaten the private liberties of citizens. Federalism ensures that power and authority are well distributed.

Federalism also provides the best means for developing a growing country, principally because it allows for experimentation. The forms of self-government that occur within smaller units fin82797_03_c03_053-074.indd 69 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Summary and Resources of governance may stimulate citizens’ interest in local affairs. This is because government is closer to home and feels more relevant to citizens. For example, people tend to be more con- cerned with their community’s decision to build a local sports stadium than with a congres- sional debate over whether to try terrorists in civilian courts or military tribunals. Because local government is closer to citizens, they can keep more of a watchful eye on what is going on. Additionally, when governance is spread out widely, something that goes wrong in one place will not adversely affect the rest of the nation. Finally, by creating many local legisla - tures with broad powers, federalism relieves the national legislature of functions and respon - sibilities that may prove too burdensome.

This was the argument that Madison made in Federalist No. 10, where he suggested an expan - sive republic would both dilute the power of states and make them the centers of local politi - cal activity. While all of this may be true, we must also remember that the future shape of the federal system is whatever the people want it to look like.

Summary and Resources Chapter Summary Federalism is the formal division of authority and power between states and the national government. In the American federal system, the states and the national government are assumed to be equal in sovereignty. The American federalism system has evolved through several phases. The first phase was Dual Federalism, which implied dual spheres of sover- eignty within the national and state governments’ respective domains. For the most part, the national government was limited to foreign affairs, and the states were responsible for domes - tic functions. As the states found themselves unable to meet the needs of their citizens during the Great Depression in the 1930s, the national government assumed more responsibility for domestic policy and programs. What emerged was Cooperative Federalism, whereby the states and national government worked together to deliver public goods and services to the people. With the advent of Cooperative Federalism, the relationship between the states and the national government changed from one of formal division of power and authority to one of intergovernmental relations. The national and state governments had to work together to get things done.

The third phase of federalism was Creative Federalism. The national government sought to create new programs and treated the states and localities as subordinate and not coequal governments. The national government offered grants on a two-for-one matching basis to create programs around the country. This transformed state and local spending priorities. In response to Creative Federalism, two separate phases of New Federalism occurred whereby the national government sought to return power and authority to the states.

To a large extent, the evolution of federalism speaks to another unique feature of American politics. The five phases reflect different conceptions about what the nature of the relation - ship between the states and the national government ought to be. Much of American politics revolves around these competing conceptions. The politics of federalism is often about which unit of governance has greater authority, and which has jurisdiction in a particular policy matter. Ultimately, this makes for a dynamic federal system. Tensions between the two fre - quently play out on the national stage. fin82797_03_c03_053-074.indd 70 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Summary and Resources Key Ideas to Remember • Federalism is understood to be the formal division of power and authority between the national government and the states. Both the national government and the states are understood to be sovereign entities even though the ultimate source of sover- eignty is the American people. • Claims to both national authority and states’ rights are rooted in the U.S. Con- stitution. Claims to national authority are based on the Supremacy (Article VI) and Commerce (Article I) Clauses, while claims to states’ rights are based on the 10 th Amendment. • The politics of federalism revolve around whether the national government has authority over the states, or whether the principle of states’ rights effectively limits national authority. • The federal relationship in the Constitution deals mainly with the relationship between the states and the national government; it does not deal with local govern - ments, as local governments fall under the purview of their respective states. At best, they can be autonomous through a home-rule charter, but they can never be sovereign as the states are. • American federalism has evolved over time from Dual Federalism, whereby the states and the national government were each sovereign in their own spheres of authority, to a situation where the national government has greater authority and the states are, in effect, subordinate to it. This new relationship has been expressed in Cooperative and Creative Federalism and more recently finds expression in the principle of unfunded mandates. • Although states are understood to be sovereign and cannot be forced to comply with national authority, the national government can encourage compliance through the use of the power of the purse, including grants-in-aid and crossover sanctions. • There are arguments about the distribution of power in a federal system, although most argue that federalism preserves individual liberty by dividing power and preventing its centralization in one government. It also allows the states to serve as laboratories of democracy—arenas for experimenting with policy before trying it out at the national level. Questions to Consider 1. How would you define federalism? 2. How has federalism changed over the years? 3. Is a federal system still necessary, or has it outlived its usefulness? 4. What are the benefits and detriments of having strong states’ rights? 5. What are some of the benefits and detriments of the layer cake versus the marble cake approach to federalism? 6. What is the constitutional basis for Arizona to assert the right to check immigrants’ documentation? 7. Is it appropriate for local governments to use the Fifth Amendment’s “eminent domain” power to promote urban renewal? Explain your answer. fin82797_03_c03_053-074.indd 71 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Summary and Resources Dual Federalism: for example, the national government delivers the mail and states maintain roads.

1799–1933 Congress passes the Social Security Act, which has a public assistance component to be jointly administered by states and national government.

1935 Congress passes the Voting Rights Act.

1965 President Reagan introduces another version of New Federalism in his State of the Union Address.

1982 Congress passes the No Child Left Behind Act.

2002 Cooperative Federalism 1933–1960s Creative Federalism 1960–1972 President Nixon introduces New Federalism. 1972 Unfunded mandates become sources oftension between states and national government. 1990s 1800 2015 Photo credits (top to bottom): James Steidl/iStock/Thinkstock, SuperStock/SuperStock, KenTannenbaum/iStock/Thinkstock, © Bettmann/Corbis, Associated Press/Evan Vucci.

Timeline: Federalism fin82797_03_c03_053-074.indd 72 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Summary and Resources block grant A type of grant-in-aid that comes in a general category and allows recipients to choose the programs and the category on which they want to spend money. categorical grant A grant-in-aid given for a specific purpose that can be spent on only that purpose. Commerce Clause A provision in Article I, Section 8 of the U.S. Constitution stating that Congress can regulate commerce between the states. concurrent powers Powers that are held both by the federal government and by the state governments. Cooperative Federalism A phase of feder - alism that began during the Great Depres - sion, during which the federal government designed and funded programs that were then implemented by the states. county A type of local government respon - sible for record keeping, the administration of elections, road construction and main- tenance, zoning, and the administration of justice. Creative Federalism A phase of federalism when the national government used grants- in-aid and crossover sanctions to encourage creative solutions and state compliance with national mandates. crossover sanction When the national gov - ernment withholds funding in one program area to ensure compliance in another. Dillon’s Rule A judge’s ruling that cities are creatures of their states. Dual Federalism A phase of federalism when both the states and national govern - ments were sovereign in their respective spheres of influence. enumerated Listed, or numbered, one by one; in the U.S. Constitution, used to describe powers that are listed, such as Con - gress’s powers in Article I, Section 8. federalism A government system where power and authority are shared by national and state governments with ultimate author - ity derived from the people. general revenue sharing When the national government gives the states a por- tion of national revenue, which they can spend as they choose. grant-in-aid Money given by the national government to the states for various uses. home-rule charters Grants of authority by state legislatures or state constitutions for cities to govern themselves. intergovernmental relations (IGR) Rela - tionships and regular dealings between dif - ferent units of governance. interposition When a state places its sover- eignty between itself and a national action to argue that the national action does not apply to that state. laboratories of democracy The idea, first articulated by Justice Louis Brandeis, that states are useful places to experiment with policies before trying them out at the national level. Medicaid Government-run medical insur- ance program for the poor and people with certain disabilities. Medicare Government-run medical insur- ance program for the elderly. municipalities Cities that are incorporated. Key Terms fin82797_03_c03_053-074.indd 73 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Summary and Resources New Federalism A phase in federalism when the national government sought to restore the traditional balance of power and authority between the states and the national government. nullification When a state can effectively veto national law. preemption The judicial principle sug- gested by the Supremacy Clause where federal legislation is supreme over state legislation conflicting with it. special districts Local governments estab- lished for a specific purpose. subsidies Special assistance or aid given by a government to support a program or project, such as a social program. Supremacy Clause Provision in Article VI of the U.S. Constitution that states that laws passed by Congress and signed by the president are the supreme laws of the land; it places supremacy of the law in the U.S.

Constitution and the national government. unfunded mandates When the national government imposes a program or cost on a state or local government without providing the money to fund that program. Further Reading Alston, L. J., & Ferrie, J. P. (1999). Southern paternalism and the American welfare state: Economics, politics, and institutions in the South, 1865–1965 . Cambridge, UK and New York, NY: Cambridge University Press.

Anton, T. J. (1989). American federalism and public policy: How the system works. Philadelphia, PA: Temple Univer - sity Press.

Beer, S. H. (Ed.). (1982). Federalism: Making the system work. Washington, D.C.: Center for National Policy.

Beer, S. H. (1993). To make a nation: The rediscovery of American federalism . Cambridge, MA: Harvard University Press.

Berman, D. R. (2003). Local government and the states: Autonomy, politics and policy. Armonk, NY: M. E. Sharpe.

Elazar, D. (1984). American federalism: A view from the states (3 rd ed.). New York, NY: Harper & Row.

Feiock, R. C., & Scholz, J. T. (Eds.). (2010). Self-organizing federalism collaborative mechanisms to mitigate institu - tional collective action. Cambridge, UK and New York, NY: Cambridge University Press.

Gerston, L. N. (2007). American federalism: A concise introduction. Armonk, NY: M. E. Sharpe.

Grodzins, M. (1974). The American system. Chicago, IL: Rand McNally.

Kettl, D. (1987). The regulation of American federalism . Baltimore, MD: The Johns Hopkins University Press.

Nugent, J. D. (2009). Safeguarding federalism: How states protect their interests in national policymaking. Norman, OK: University of Oklahoma Press.

Ryan, E. (2011). Federalism and the tug of war within. New York, NY: Oxford University Press.

Wright, D. S. (1982). Understanding intergovernmental relations . Monterey, CA: Brooks/Cole. fin82797_03_c03_053-074.indd 74 3/24/16 1:40 PM \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution.