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Evolution of the Federal System

Evolution is a slow and continuous change, often from the simple to the complex. The federal system established by the Constitution has evolved from a simple system of dual federalism to a complex system of intergovernmental relations characterized by conflicted federalism.

Evolution has occurred in the power relationship between the national government and the states, the state governments and their local governments, and the national government and local governments. However, our focus here is on the evolution of the dual sovereignty established by the U.S. federal system of government. We first survey four types of federalism, characterized by four different power relationships between the national and the state governments, all of which continue to this day. We then explore various means by which the national government has altered the power relationship between it and the state governments.

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Dual Federalism

Initially, the dual sovereignty of the U.S. federal system was implemented in such a way that the national and state governments acted independently of each other, as in political scientist Deil Wright's coordinate model of intergovernmental relations. (See “Analyzing the Sources.”) Political scientists give the name dual federalism to this pattern of implementation of the federal system, whereby the national government takes care of its enumerated powers and the states independently take care of their reserved powers. From 1789 through 1932, dual federalism was the dominant pattern of national-state relations. Congresses and presidents did enact some laws that states argued infringed on their powers, and the Courts typically found in favor of the states in those cases. Yet as the 1819 McCulloch case shows, sometimes the Court ruled in favor of the national government.

Cooperative Federalism

A crippling economic depression that reached global proportions, known as the Great Depression, began in 1929. To help state governments deal with the domestic problems spawned by the economic collapse, Congress and President Franklin D. Roosevelt (1933–1945) approved numerous policies, collectively called the New Deal. Through those policies, the independent actions of national and state governments to fulfill their respective responsibilities evolved into cooperative efforts. Grants-in-aid—transfers of money from one level of government to another (also known as intergovernmental transfers)—became a main mechanism of President Roosevelt's New Deal programs.

The national grants of money offered to the state governments, and eventually also to local governments, during the Great Depression had few specific terms and conditions and did not need to be paid back. State and local governments welcomed the national grants, which assisted them in addressing the domestic matters that fell within their sovereignty while allowing them to make most of the specific program decisions to implement the policy. The era of federalism that began during the Depression, with its growing number of collaborative, intergovernmental efforts to address domestic matters reserved to the states, is the period of cooperative federalism (1932–1963), described by Wright's overlapping model. (See “Analyzing the Sources.”)

Centralized Federalism

By the time of Lyndon Johnson's presidency (1963–1969), a new kind of federalism was replacing cooperative federalism. In this new form of federalism, the national government imposed its own policy preferences on state and local governments. Specifically, in centralized federalism, directives in national legislation, including grant-in-aid programs with ever-increasing conditions or strings attached to the money, force state and local governments to implement a particular national policy. Wright's inclusive model comes closest to diagramming centralized federalism. (See “Analyzing the Sources.”)

Presidents since Richard Nixon (1969–1974) have fought against this centralizing tendency by proposing to return policy responsibilities (policy making, policy financing, and policy implementation) to state and local governments. Presidents Nixon and Ronald Reagan (1981–1989) gave the name new federalism to their efforts to revert such obligations to state and local governments, and today we use the term devolution to refer to the return of policy responsibilities to state and local governments.

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DEIL WRIGHT'S MODELS OF INTERGOVERNMENTAL RELATIONS IN A FEDERAL SYSTEM

The diagram below presents Deil Wright's models of intergovernmental relations in the United States.* The coordinate model, indicates that the relationship between the national government and state governments is one of independence. Each government has autonomy over its functions. The overlapping model shows the interdependent relationships among all three levels of government in the United States. Wright argues that the authority pattern in the overlapping model is based on bargaining between the national and the state governments. Finally, the inclusive model shows dependent relationships with a hierarchical pattern of authority.

Evaluating the Evidence
  • Which of Wright's models do you think the Constitution's framers—the creators of the U.S. federal system—had in mind? Justify your selection.

  • Which of Wright's models do you think best presents the relationships among the national, state, and local governments today? Explain.

  • Which model displays the relationships and pattern of authority that you believe will best serve you and your family? Justify your selection.

Republicans and Democrats (including presidents, members of Congress, and state and local lawmakers) broadly support devolution, but they debate which elements of the policy-making process should be devolved: policy creation, financing, and/or implementation. They also butt heads over which policies to devolve. The legislation and court decisions that result from these debates make for a complicated coexistence of dual federalism, cooperative federalism, and centralized federalism.

Conflicted Federalism

David B. Walker, a preeminent scholar of federalism and intergovernmental relations, uses the term conflicted federalism to describe today's national-state governmental relations, which involve the conflicting elements of dual, cooperative, and centralized federalisms.17 Efforts to centralize policy making at the national level are evident, as are efforts to decentralize the implementation of national policies to the state and local levels. For some policy matters, the national and state governments operate independently of each other, and hence dual federalism is at work. For most policies, however, intergovernmental efforts are the norm. These efforts may be voluntary and a means to advance state policy priorities (cooperative federalism), or they may be compelled by national legislation (centralized federalism).

 
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Benjamin Franklin's 1754 cartoon, displaying a rattlesnake cut in eight pieces and the phrase “Join, or Die,” emphasized the need for the colonies to work together against threats by Native Americans. During the War for Independence, the cartoon became popular as a symbol of the need for colonies to unite. In 1775, the newly established U.S. Navy first flew the Gadsden Flag, which portrays a coiled rattlesnake with 13 rattles and the phrase “Don't Tread on Me,” symbolizing the power and persistence of the united colonies. Today's Tea Party movement members, angered by a national government they perceive to be too involved in their lives and the economy—in violation of the founders' notion of federalism—have adopted the Gadsden Flag as a symbol of their patriotic anger.
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The era of conflicted federalism, has seen an increase in the number of legal challenges to national legislation that mandates state and local action. In the various cases that the Supreme Court has heard, the justices have ruled inconsistently, sometimes upholding or even expanding state sovereignty and at other times protecting or expanding national sovereignty. For example, in 1976 the Supreme Court ruled in National League of Cities v. Usery that state and local governments were not legally required to comply with the national minimum wage law—hence protecting state authority.18 Then nine years later, in the Garcia v. San Antonio Transportation Authority (1985) case, the Court ruled that national minimum wage laws did apply to state and local government employees—thus expanding national authority.19

Another policy matter that has been subject to conflicting Court decisions is the medical use of marijuana. California has fought an up-and-down battle with the national government over medical uses of marijuana. In 1996, California voters approved the Compassionate Use Act, allowing people to grow, obtain, or smoke marijuana for medical needs, with a doctor's recommendation. Then in 2001, the U.S. Supreme Court ruled that the national government could charge people who distributed marijuana for medical use with a crime, even in California, where the state law allowed such activity.20 The Court interpreted the national supremacy clause to mean that national narcotics laws took precedence over California's law, which California had argued was grounded in the reserved powers of the states. But in 2003, the Court refused to review a case challenging a California law allowing doctors to recommend marijuana use to their patients.21 As a consequence of the Court's refusal to take on the case, the decision from the lower court prevailed. The lower court's ruling had been that doctors could not be charged with a crime for recommending marijuana to patients. To add to the confused legal status of medicinal marijuana in California, the U.S. Supreme Court in 2005 upheld the right of the national government to prosecute people who smoke the drug at the recommendation of their doctors, as well as those who grow it for medical purposes.22

The confusion caused by conflicting Court decisions regarding medical marijuana has become even more problematic since October 2009, when President Obama's attorney general announced that the federal government will not prosecute individuals who are dispensing marijuana or who are using it in compliance with state law in one of the states that has legalized such activities. How did the U.S. federal system evolve from dual federalism to today's conflicted federalism?

 
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Although under federal law the growth, sale, and use of marijuana for any purpose are illegal, thirteen states have legalized its use for medicinal purposes. Marijuana dispensary owners, such as Joshua Braun of California, operating in accordance with their state's medicinal marijuana laws were pleased when the Justice Department announced in 2009 that it will not prosecute them for violating federal narcotics laws.
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Landmarks in the Evolution of Federalism: Key Constitutional Amendments

Understanding the U.S. federal system's evolution from dual federalism to conflicted federalism requires a brief review of the tools the national government uses to expand its authority to direct state and local governments' domestic policies. Although the formal language of the Constitution with regard to the distribution of national and state sovereignty remains essentially as it was in 1791 (when the Tenth Amendment was ratified), three amendments—the Fourteenth, Sixteenth, and Seventeenth—have had a tremendous impact on the power relationship between national and state government. The Civil War, which was a catalyst for the ratification of the Fourteenth Amendment, also influenced the national-state power relationship.

THE CIVIL WAR AND THE POSTWAR AMENDMENTS

The military success of the northern states in the Civil War (1861–1865) meant the preservation of the union—the United States of America. The ratification of the Thirteenth Amendment (1865) brought the legal end of slavery in every state. In addition, the Fourteenth Amendment (1868), which extended the rights of citizenship to individuals who were previously enslaved, also placed certain limits and obligations on state governments.

The Fourteenth Amendment authorizes the national government to ensure that the state governments follow fair procedures (due process) before taking away a person's life, liberties, or pursuit of happiness and that the states guarantee all people the same rights (equal protection of the laws) to life, liberties, and the pursuit of happiness, without discrimination. In addition, the amendment guarantees the privileges and immunities of U.S. citizenship to all citizens in all states. Accordingly, since the Fourteenth Amendment's ratification, Congresses and presidents have approved national laws that direct the states to ensure due process and equal protection. This legislation includes, for example, laws mandating that all government buildings, including state and local edifices, provide access to all persons, including individuals with physical disabilities. In addition, the Supreme Court has used the Fourteenth Amendment to justify extending the Bill of Rights' limits on national government to state and local governments (under incorporation theory, which Chapter 4 considers). And in Bush v. Gore (2000), the Supreme Court used the amendment's equal protection clause to end a controversial Florida ballot recount in the 2000 presidential election.23

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Conducting elections is a power reserved for the states. Therefore, state laws detail how citizens will cast their votes and how the state will count them to determine the winners. In the 2000 presidential election, Democratic candidate Al Gore successfully challenged, through Florida's court system, the vote count in that state. The Florida State Supreme Court interpreted Florida election law to require the state to count ballots that it initially did not count. In response, Republican candidate George W. Bush challenged the Florida Supreme Court's finding by appealing to the U.S. Supreme Court. Lawyers for candidate Bush argued that Florida's election law violated the Fourteenth Amendment's equal protection clause by not ensuring that the state would treat each person's vote equally. The U.S. Supreme Court found in favor of candidate Bush, putting an end to the vote recount called for by the Florida Supreme Court. Candidate Bush became President Bush. (For more on the 2000 election, see Chapter 9.)

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A Broward County, Florida, election official attempts to determine whether there is a countable vote on this ballot during the 2000 presidential election. The Florida Supreme Court called for a recount of ballots in several counties, but the U.S. Supreme Court stopped the Florida recount, finding that the subjectivity of election officials determining which votes were countable violated the Constitution's equal protection clause.
THE SIXTEENTH AMENDMENT

Passage of the Sixteenth Amendment (1913) powerfully enhanced the ability of the national government to raise money. It granted Congress the authority to collect income taxes from workers and corporations without apportioning those taxes among the states on the basis of population (which had been mandated by the Constitution before this amendment).

The national government uses these resources to meet its constitutional responsibilities and to assist state governments in meeting their constitutional responsibilities. Moreover, the national government also uses these resources as leverage over state and local governments, encouraging or coercing them to pursue and implement policies that the national government thinks best. Specifically, by offering state and local governments grants-in-aid, national officials have gained the power to determine many of the policies these governments approve, finance, and implement. For example, by offering grants to the states for highways, the federal government encouraged each state to establish a legal drinking age of 21 years (which we explore later in the chapter).

THE SEVENTEENTH AMENDMENT

Before ratification of the Seventeenth Amendment in 1913, the Constitution called for state legislatures to select U.S. senators. By that arrangement, the framers strove to ensure that Congress and the president would take the concerns of state governments into account in national policy making. Essentially, the original arrangement provided the state legislatures with lobbyists in the national policy-making process who would be accountable to the states. Once ratified, the Seventeenth Amendment shifted the election of U.S. senators to a system of popular vote by the citizens in a state.

With that change, senators were no longer directly accountable to the state legislatures' because the latter no longer selected the senators. Consequently, state governments lost their direct access to national policy makers. Some scholars of federalism and intergovernmental relations argue that this loss has decreased the influence of state governments in national policy making.24

Further Evolutionary Landmarks: Grants-in-Aid

In 1837, the national government shared its revenue surplus with the states in the form of a monetary grant. But the government did not make a habit of such financial grants-in-aid until the Great Depression of the 1930s. Today, there is growing controversy over the strings attached to the various kinds of grants issued by the federal government.

CATEGORICAL GRANTS

Historically, the most common type of grant-in-aid has been the categorical formula grant—a grant of money from the federal government to state and local governments for a narrow purpose, as defined by the federal government. The legislation that creates such a grant includes a formula determining how much money is available to each grant recipient. The formula is typically based on factors related to the purpose of the grant, such as the number of people in the state in need of the program's benefits. The Census Bureau collects much of the data used in grant formulas through the decennial (occurring every ten years) census, which is mandated by the U.S. Constitution. (More than 400 billion grant dollars will be distributed based on the data collected in the 2010 Census.) Categorical grants come with strings—that is, rules and regulations with which the recipient government must comply.

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One typical condition is a matching funds requirement, which obligates the government receiving the grant to spend some of its own money to match a specified percentage of the grant money provided. Matching funds requirements allow the national government to influence the budget decisions of state and local governments by forcing them to spend some of their own money on a national priority, which may or may not also be a state priority, in order to receive national funding.

The National Decennial Census
THEN (1990) NOW (2010)
State and local governments played a limited role in updating the Census Bureau address lists for the 1990 Census. State and local governments are very involved in updating the Census Bureau address lists for the 2010 Census.
State and local governments played a limited role in educating people about, and encouraging people to complete, the Census. State and local governments, as well as community organizations, are very involved in educating people about, and encouraging people to complete, the Census, with a focus on illegal immigrants.
One in six households received the long Census questionnaire, with 100 questions. All households receive the same Census questionnaire, with 10 questions.
Respondents were instructed to select one of the listed races to define themselves. Respondents are instructed to select all relevant races from the list to define themselves.
WHAT'S NEXT?
  • Do you think the response rate for the 2010 Census will surpass the response rate of the 2000 Census? Explain your answer.

  • Will state and local governments become even more involved in the Census in the future? Explain your answer.

Since the 1960s, the national government has also offered categorical project grants. Like the categorical formula grant, a categorical project grant covers a narrow purpose (program area), but unlike the formula grant, a project grant does not include a formula specifying how much money a recipient will receive. Instead, state and local governments interested in receiving such a grant must compete for it by writing proposals detailing what programs they wish to implement and what level of funding they need. A categorical project grant has strings attached to it and typically offers much less funding than a categorical formula grant.

BLOCK GRANTS

Another type of formula-based intergovernmental transfer of money, the block grant, differs from categorical formula and categorical project grants in that the use of the grant money is less narrowly defined by the national government. Whereas a categorical grant might specify that the money is to be used for a child care program, a block grant gives the recipient government more discretion to determine what program it will be used for within a broad policy area such as assistance to economically needy families with children. When first introduced by the Nixon administration in the 1970s, the block grant also had fewer strings attached to it than the categorical grants. Today, however, the number and the specificity of conditions included in block grants are increasing.

AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009

In February 2009, President Obama and the 111th Congress enacted the American Recovery and Reinvestment Act (ARRA). The goal of the ARRA was to stimulate the nation's economy, which was in the depths of what some have called the Great Recession. The ARRA included $499 billion in spending, $280 billion of which went to state and local governments through grants. Most of the money that was quickly distributed to state and local governments was in the form of categorical formula grants for specific government programs related to health, nutrition, and income security, such as unemployment. Where states had more discretion over the use of grant money, they used it to keep people employed or to create new jobs. For example, state and local governments used the grants to keep teachers and police officers on the job. Moreover, they created jobs in the construction industry by hiring private construction firms to do government construction projects. The federal government stimulus money in the form of competitive categorical project grants was distributed more slowly because state and local governments had to prepare proposals that made a case for the federal government to fund their projects. Categorical project grants provided funds for energy efficiency programs, broadband access, high-speed rail transportation projects, and educational reforms.25

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State and local governments have grown dependent on national financial assistance, and so grants are an essential tool of national power to direct state and local government activity. Although the states welcome federal grant money, they do not welcome the strings attached to the funds.

STATE ATTEMPTS TO INFLUENCE GRANT-IN-AID CONDITIONS

State government opposition to the conditions attached to national grants came to a head in 1923 in the case of Massachusetts v. Mellon.26 In this case, the Supreme Court found the conditions of national grants-in-aid to be constitutional, arguing that grants-in-aid are voluntary cooperative arrangements. By voluntarily accepting the national grant, the justices ruled, the state government agrees to the grant conditions. This 1923 Court decision was essential to the proliferation of national grants in subsequent years and to the evolution of federalism and intergovernmental relations as well. But the Court's decision did not end states' challenges to grant conditions.

In 1987, South Dakota challenged a 1984 national transportation law that penalized states whose legal drinking age was lower than 21 years. The intent of the national law was to decrease “drinking while intoxicated” (DWI) car accidents. States with legal drinking ages lower than 21 years would lose 10 percent of their national grant money for transportation. South Dakota argued that Congress was using grant conditions to put a law into effect that Congress could not achieve through national legislation because the law dealt with a power reserved to the states—determining the legal age for drinking alcoholic beverages.

In its decision in South Dakota v. Dole, the Court found that the national government could not impose a national drinking age because setting a drinking age is indeed a reserved power of the states.27 Yet, the Court ruled, the national government could encourage states to set a drinking age of 21 years by threatening to decrease their grants-in-aid for highway construction. In other words, conditions attached to voluntarily accepted grants-in-aid are constitutional. Ultimately, the national policy goal of a 21-year-old drinking age was indeed accomplished by 1988—not through a national law but through a condition attached to national highway funds offered to state governments, funds on which the states are dependent. The national “encouragement” for states to establish 21 years as the legal drinking age is still controversial, as this chapter's “Thinking Critically About Democracy” section highlights.

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The Constitution reserves to the states the authority to establish the legal drinking age. However, the national government's grant-in-aid for highways requires states to set 21 years as the age when people can legally purchase alcohol, or the states risk losing a percentage of their highway grant dollars.

Over time, the number and specificity of the grant conditions have grown. State and local governments have increasingly lobbied national lawmakers during the policy-making processes that create and reauthorize grants. One goal of this intergovernmental lobbying is to limit the grant conditions—or at least to influence them to the states' advantage. In other words, lobbyists for an individual state work to ensure that the conditions, including the grants' formulas, benefit that state. Beyond the efforts of lobbyists hired by individual states, coordinated lobbying on behalf of multiple states, municipal governments, and county governments is common.

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If a state does not want to comply with a grant condition, then it need not accept the grant. The problem for state and local governments is that they have come to rely on national grant funds. In 2009 and 2010, almost half of state and local revenue came from national grants. However, after the ARRA grant money is distributed, the percentage of state and local revenue coming from the national government will probably decrease to what it was before the Great Recession, about 30 percent.30 Because the national government has no constitutional obligation to offer grants-in-aid to state or local governments, intergovernmental lobbies persistently lobby Congress to ensure not only favorable grant formulas but also the survival of grants-in-aid on which state and local governments depend. They also lobby to prevent the passage of national laws mandating specific state and local actions.

SHOULD STATE GOVERNMENTS LOWER THE MINIMUM LEGAL DRINKING AGE TO 18?
The Issue:

The 1984 National Minimum Drinking Age Act mandated that any state that did not raise its minimum purchase and public possession of alcohol age to 21 years would lose 10 percent of its federal highway grants-in-aid. By 1988, all states had established 21 years as their minimum age for purchasing and public possession of alcohol. (Note that although it is illegal to sell alcohol to a person under the age of 21 in all states, most states allow parents to provide their children with alcohol in the privacy of their own homes.)28 In 2009, John McCardell Jr., president emeritus of Middlebury College, and 135 college and university presidents issued the Amethyst Initiative. This initiative called on elected officials to support a public debate over the effects of the 21-year-old drinking age. The question, Should state governments lower the drinking age?, fuels the debate.

Yes:

The traditional argument for lowering the minimum legal drinking age (MLDA) is that it is not moral or logical for governments to say that at the age of 18 citizens are responsible enough to vote, decide guilt or innocence as a juror in a trial, and take up arms for the nation, but they are not responsible enough to drink a beer. Other supporters of a lower MLDA argue that it will decrease the rate of binge drinking among college students, which has increased among college students, especially women, since the 1980s.

No:

According to the National Institutes of Health, “since the early 1980s, alcohol-related traffic fatalities have been cut in half, with the greatest proportional declines among persons 16–20 years old.” Moreover, the U.S. Department of Transportation estimates that increasing the drinking age to 21 years prevents 1,000 traffic deaths each year.29

Other approaches:

McCardell and his supporters are calling on the federal government to provide a waiver of the 10 percent reduction in highway grants-in-aid penalty to states that participate in a pilot alcohol-education program coupled with an MLDA of 18 years. A certified educator, trained to cover alcohol-related legal, ethical, health, and safety issues, would teach the education program. Community involvement, such as attending DWI court hearings and establishing safe-ride programs, would complement in-class instruction. Students who successfully complete the program and pass a required final exam would receive a license entitling them to the same drinking privileges and responsibilities currently guaranteed to those 21 years of age and older.

What do you think?
  • What role, if any, do you think increased car safety (air bags, for example) had in the decrease of alcohol-related traffic fatalities since the early 1980s? Do you think seat-belt laws can explain some of the decrease? What factors, other than the change in MLDA, might help account for the decrease in alcohol-related traffic fatalities?

  • Other than an increase in binge drinking, what negative effects might you attribute to the states lowering MLDA to 18 years?

  • Does the fact that so many people under the age of 21 years drink threaten the legitimacy of the law or the authority of the government? Explain.

Federalism's Continuing Evolution: Mandates

In our earlier analysis of the constitutional distribution of sovereignty, we considered specific examples of the Court's expansion of national authority through its decisions in cases involving conflicts over constitutional interpretation. The constitutional clauses most often questioned are

With those Court decisions in hand, the national government is able to mandate certain state and local government actions. In addition, through a process known as preemption, the federal government can take away states' and localities' policy authority and impose its policy choices on state and local governments.

National mandates are clauses in national laws, including grants-in-aid, that direct state and local governments to do something specified by the national government. Many mandates relate to ensuring citizens' civil rights and civil liberties, as in the case of the mandate in the Rehabilitation Act of 1973 requiring that all government buildings, including those of state and local authorities, be accessible to persons with disabilities. When the national government assumes the entire cost of a mandate, it is a funded mandate. When the state or local government must cover all or some of the cost, it is an unfunded mandate.

Also common is the federal government's use of preemption. Preemption means that a national policy supersedes a state or local policy because it deals with an enumerated or implied national power. Therefore, people must obey, and states must enforce, the national law even if the state or local government has its own law on the matter.

The Supreme Court typically has supported the federal government's arguments that the national supremacy clause and the necessary and proper clause—coupled with the powers delegated to the national government to provide for the general welfare and to regulate interstate commerce—give the federal government the authority to force state and local governments to implement its mandates. The Court has also supported the national government's argument that it can attach conditions to the grants-in-aid it offers state and local governments, hence forcing those that voluntarily accept national grants to implement policies established by national lawmakers.