FEDERALISM

1. FEDERALISM

2. Overview • Federalism as a key feature of our Constitutional system • Differences between national govt. powers and state govt. powers • Evolution of federalism from dual federalism to cooperative federalism to fiscal federalism • Role of federalism in the Obamacare and Same Sex marriage cases

3. Introduction • One of the most distinctive features is federalism. No other nation state grants as much autonomy and responsibility to its regional governments. • Contributes to the dispersion of power in the US.

4. Definition of Federalism • A system of shared sovereignty in which some powers are designated for the national level and other powers are reserved for the states. • A two-layered system of government, in which each state has its own constitution, state laws, executive, legislative and judicial branches, with powers not derived from the national government

5. Compared to Confederation and Unitary Systems • More centralized than under Articles of Confederation, less centralized than unitary system

6. Role of the States in the Federal Constitution • Basis for representation in Congress • Elect delegates to Electoral College • Ratified Constitution • Ratify amendments • Can call for a new Constitutional Convention

7. Constitutional Structure • States do not derive powers from the national govt. but from the Constitution • National govt. powers are “enumerated,” specified in, e.g., Art. 1 section 8 • State powers are “reserved” or protected by 10th Amendment but not specified. • Article 6 “Supremacy Clause” guarantees that federal law preempts state laws when they conflict.

8. Powers of Government

9. Pros • 13 states existed prior to the Constitution • Continental scale country means it is too difficult to govern all local matters from a central government • Allows for more local control, regional differences, flexibility, and experimentation

10. Cons • Lack of uniform national standards • Example—Education • Harder to develop and implement policies to address problems at national level • Example of New Orleans after Hurricane Katrina • Cities are underrepresented in the system; they are the forgotten stepchildren of the US Constitutional system • Example: Flint, MI water problem

11. Expansion of National Government Powers Over the States • Initially subordinate, federal government now dominates the states • Implied powers clause • Interstate commerce clause • Judicial review/preemption doctrine • 14th Amendment equal protection clause • 16th Amendment federal income tax • Emergence of US as a superpower

12. Stage 1: 1790-1870 National Supremacy • Federalist Chief Justice John Marshall • Gibbons v. Ogden (1824)—interstate commerce is a federal function • Civil War • Post-Civil War Amendments—especially 14th

13. McCulloch v. Maryland 1819 • Federal government chartered 2nd Bank of the United States which was not in Constitution • State of Maryland levied a tax on local branch • Supreme Court ruled it cannot—”the power to tax is the power to destroy.” • “Necessary and proper clause” grants implied power to Congress to create new federal agencies. • Most federal government agencies owe their existence to Congress’s implied powers.

14. Gibbons v. Ogden 1824 • Ogden in NJ purchased monopoly license to operate a steamboat between NJ and NY. • Gibbons challenged it with his own service and was sued by Ogden. • Supreme Court ruled that NJ could not grant a monopoly because only the federal government had jurisdiction under interstate commerce clause. • Huge expansion of federal interstate commerce powers created New Deal social programs, economic regulations, 1970s environmental laws

15. Civil War • Established that states could not voluntarily secede from US • 14th Amendment equal protection and due process clauses strengthened federal government’s dominance and is basis for civil rights.

16. Stage 2: 1870-1933 Dual Federalism • End of Reconstruction/Compromise of 1876—federal government withdrew • Strict separation between local functions and national functions—”Layer-cake” analogy • Industrialization focused nation on new issues • Rise of racial segregation as white southerners regain control of their states.

17. Layer Cake Federalism • Distinct layers held together by constitutional icing

18. Stage 3: 1933- Cooperative Federalism • 16th Amendment (1909)—fed. Income tax • Great Depression leads to state and local government bankruptcies • New Deal—federal government with more resources stepped in to regulate banking, expand social programs and work programs • “Marble cake” analogy—intermingling of functions • Examples: urban development grants, federal welfare, Interstate Highways, Medicaid, education training

19. Marble Cake Federalism • Many government programs now involve an intermingling of state and national governments. • Note that chocolate and vanilla swirls are still distinct. • Examples: Medicaid; Interstate highway system; Clean Air Act

20. Stage 4: Fiscal Federalism • Beginning with “Great Society” era, 1960s. • Nearly $700 B annually, ~20% of federal budget • Federal funding now covers 1/3 of state budgets • Federal funds come with strings to make state and local governments follow national policies.

21. Federal $ account for 19% of state economic activity

22. Fiscal Federalism

23. Examples of Fiscal Federalism • States had to raise drinking age to 21 or risk losing federal highway $ • Public schools must provide handicap access as a condition of federal education grants. • States using federal highway construction funds must hire a % of minority construction firms

24. Unfunded Mandates • Unfunded federal mandates—no funding, but federal requirements • States may lose funding for other programs if they don’t comply • Examples • Medicaid • Clean Air Act • Americans With Disabilities Act • No Child Left Behind Act • Some aspects of airport security

25. NAIB v. Sebelius 2010 • Passage of Affordable Care Act in 2009 • Main Obamacare case—expansion of health insurance using individual mandate, employer mandate, health insurance mandates, subsidies, taxes, and Medicaid. • But insurance regulation is mostly a state function—not national.

26. Individual Mandate • All individuals must have health insurance. • If not provided by employer or government, you must purchase it from online marketplace. • Federal government will subsidize the premiums for most. • If you don’t get insurance, you owe a tax penalty of up to $2085/year (2017).

27. Discussion • What gives the federal government the Constitutional authority to force you to buy something?

28. Answer • The Supreme Court rejected the argument based on the interstate commerce powers. • But Chief Justice John Roberts argued that the federal government’s taxing powers permitted it—it was a tax, not a fine.

29. Medicaid Expansion • Medicaid provides health insurance for the poor (<$26,000 for household of 4). • Obamacare required states to expand Medicaid coverage up to 138% of poverty line ($36000) to help the working poor. • Feds would pay for ALL of the expansion • States that refused would lose ALL of their federal Medicaid funding. • That’s 10% of their overall budgets

30. Discussion • Can the federal government use fiscal federalism to force states to expand Medicaid?

31. Answer • No—at 10% of state budgets, it’s not a voluntary choice by states. • Program has to be entirely voluntary (“opt in”). • 13 states have not opted in. Why?

32. Obergefell v. Hodges 2015 • Same sex marriage case • Licensing marriages is a reserve (state) power • Case rested on the Equal Protection Clause of 14th Amendment • All states must provide marriage licenses to same sex couples

33. Discussion on Federalism • How would American politics be different if it had remained a confederation? • How would American politics be different if the framers had dissolved the states and formed a unitary system? • Why do conservatives prefer stronger state governments and liberals prefer a stronger national government?