The politics of federalism

From Governing America The Politics of a Divided Society Robert Singh

Chapter by John Francis Professor of Political Science Utah University.

Varieties of federalism

The importance of locating a decision where it helps to achieve a policy goal drives much of the practice of American federalism. But another dimension to understanding the shifting fortunes of states' rights and federal power is the connection to unresolved debates over whether the United States is a national community or a community of communities. Some scholars argue that what characterizes federalism in the United States is the ambivalence people have about the ends it should serve. Is the end to be served a federation of separate communities or is it a national community, federally organized? These competing ends have led to two very different understandings of what American federalism should mean.

Over the years, these two understandings have been given many names but they are best known today as dual federalism and cooperative federalism. These understandings of federalism have coexisted, often uneasily, for much of the nation's history. Dual federalism assumes two distinct and separate spheres of authority: one sphere for the states and one sphere for the national government. This duality is often described as 'layer cake' federalism. In contrast, cooperative federalism emphasizes that different levels of government exercise their separate constitutional powers collaboratively to develop and implement public policy for the nation as a whole. Often this model of cooperation is described as 'marble cake' federalism. Such pastry metaphors have long been popular in analyses of federalism. Both layer cake and marble cake understandings of federalism have raised more questions than they have answered. The layer cake conception of responsibilities raises the obvious and fundamental question of whether two, separate spheres really exist. Perhaps the energy and force of American politics and its intrusive policy consequences render sorting out what belongs in the state sphere or the national sphere an absurd exercise. Policy areas from arsenic in drinking water to medical care for the elderly seem to involve all levels of government together. Cooperative federalism raises its own immediate challenges as to what is entailed in the cooperation between states and the national gov­ernment. Perhaps its major quandary is how to engage states that do not want to cooperate with the national government in a particular policy direction. Such engagement is an ever-present problem in pol­icy areas, from an end of life decision-making to land use to nuclear waste disposal. These difficult ques­tions challenge both dual federalism and cooperative federalism to confront the ambivalent expectations that Americans have long held about federal state relations. It is also easy to see why federalism is both a flash-point for political conflicts and the forum where political conflict is played out.

From Cooperative to Devolving Federalism

The twentieth century was characterized by a steady expansion of federal responsibilities, notably in social and economic regulation. Traditional federal responsibilities such as defence, monetary policy, public works, pensions, public land management, and international trade all expanded greatly—so greatly that in many areas they appeared to be trans­formed as many new programmes came into being. States, particularly in the final third of the century, developed a level of managerial sophistication, and provided a wide range of services that stood in sharp contrast to perceptions of their political performance earlier in the century. The under­standing of what federalism meant underwent radical revision between the 1930s and the 1960s. It would change again in the 1980s and 1990s. Now, the twenty-first century may be bringing a new shift in understanding or a recovery of past approaches.

During the Great Depression of the 1930s, the federal government began to assume a much greater role in domestic affairs, ranging from welfare to eco­nomic and social regulation to federal financing of research in many areas. The federal government under President Franklin Roosevelt's New Deal expanded into areas that were traditionally the domain of state and local governments, such as care for the indigent. More to the point, perhaps, some of these areas were not undertaken by any level of government. This expansion of governmental activity in the 1930s as a response to the depressed economy intertwined various levels of government through the strategy of federal administrators pro­viding grants-in-aid to the states. But it left to the states and local governments administration of the programmes funded by these grants. This collaboration between the states and the national govern­ment became known as cooperative federalism and appeared to herald the end of dual federalism.

By the 1950s cooperative federalism was well established, even with a Republican administration in office whose members were deeply sceptical about the direction that the New Deal had taken. The Eisenhower administration did not roll back the New Deal, but extended cooperative federalism by construction of the national highway system. Con­gress appropriated 90 per cent of the funds and set the standards for the freeway system. Construction of the roads themselves was undertaken by the states. National defence was used by Congress to justify its funding for the highway system, but its use was largely civilian.

During the 1960s, it appeared that metaphors of the layer cake and even the marble cake were melting into a large sheet cake thickly covered by an icing of federal programmes. The Democratic adminis­tration's Great Society during the 1960s trebled the number of federal grants to the states, many of which were directed to local governments and other entities. The Great Society shifted from the model of grants-in-aid to categorical grants. Categorical grants required that applicants meet specific standards as to how the funds were to be expended. Federal categorical grants that specified terms were detailed for a growing number of programmes designed to end poverty. During the 1960s it seemed that federal engagement, in seeking to solve or at least to ameliorate the condition of the disadvantaged, was bypassing state govern­ments and going directly to localities and private organizations. Increasingly, federal pre-emption of sub-national programmes became a tactic of choice for federal policy-makers. Pre-emption allows the federal government to take over programmes that are failing to meet defined federal standards. By 1985, the Supreme Court in its Garcia decision appeared to eliminate all barriers to federal involvement in public policy. The Court suggested that the Tenth Amendment, which reserved all un-enumerated powers to the states, had little practical impact on general federal legislation. By the 1990s, subsequent decisions had much weakened the scope of Garcia.

Debates over fund transfers to the states had been, since the 1930s, emblematic of the controversy over the shifting balance of power between the states and the national government. During the presidency of Richard Nixon, the federal government expanded its social regulatory agenda, notably in the area of environmental policy. Indeed, the ground was laid for a larger federal presence in subsequent administrations. At the same time, the Nixon administration sought to reorganize fund transfers to the states into the form of block grants, thus enabling the states to exercise greater discretion in how to spend the transferred funds. During the 1970s, the perception of a stagnating economy and growing social tensions seemed to connect to a politically persuasive argument that the federal government was contributing to the problems facing the nation rather to solving these problems. In 1980 Ronald Reagan was elected on the platform that the federal government was the • problem at home for being too strong and the problem abroad for not being strong enough. In his inaugural address, President Reagan seemed to revive dual federalism with his statement that the federal government was the result of a compact among the states.

Reagan to Clinton

In his first inaugural address, Ronald Reagan stated his understanding of what American federalism should be. Federalism, it seemed, should return to the dual federalism of old: 'All of us need to be reminded that the Federal Government did not create the States; the States created the Federal Government.' This view was contested, but it presaged a change in the nature of the relationship between the states and the national government. There was a change in the expectation that the national government would continue to expand, and to do so at the expense of the states. Fourteen years later, the critique of central power had become a mandatory mantra for Republicans and a number of leading Democrats. In January 1996, a Democratic President, Bill Clinton, in his State of the Union Address, declared that 'the era of big government' was 'over'. In the executive branch, Congress and the Supreme Court reached decisions that shifted the balance of power between the states and the national government, in some areas quite significantly. A major exampl was the shift of welfare from a federal entitlement pro­gramme to a block grant programme for the states. In many ways the Reagan administration evoked the language of states' rights. But its record was one of supporting pre-emption and for the most part imparting new managerial values and directions to the conduct of government rather than shifting decision-making to the states. The Reagan administration did cut federal taxes, however, thus reducing or at least challenging the capacity of the federal government to undertake new initiatives.

Two congressional initiatives shifted power to the states from the federal government during the Clinton administration. One of the two, welfare reform, was a fundamental shift. The other initiative, a limit on unfunded mandates, was rather less important but symbolically significant: legislation designed to limit the practice of the federal govern­ment acting to impose programmes on the states without the resources to implement them. The understanding of welfare payments shifted in the mid-1990s from a federal entitlement to a limited block grant from the federal government to the states, which were given a good deal of discretion in the use of the funds.

The power to pre-empt state laws when they con­flict with federal acts is impressively elastic. The steady growth of federal legislation in many areas allowed the federal government to require—that is, to establish a mandate—that states undertake a specific activity, such as job training for welfare beneficiaries or lead reduction in drinking water. The federal government can also undertake the obverse by stopping—that is, imposing a restraint—on states from undertaking certain actions. Under the Clean Water Act, for example, states may be prohibited from highway construction that endangers certain wetlands. But it was the growth in mandates that became a major issue in the early 1990s. Congres­sional action to expand benefits or programmes without providing additional funding had encom­passed over 150 such mandates by the early 1990s. The Republicans in the 1994 election made such 'unfunded mandates' an issue. In 1995, Congress passed the Unfunded Mandates Relief Act. Under this Act, when Congress requires the states to implement new legislation that demands significant expenditures without transfers of federal funds, a separate vote must be scheduled to determine if Congress wishes to impose such an unfunded mandate on the states.

Certainly one of the most dramatic changes in federal-state relations during this period was the shift in the federal welfare programme. In 1996, Congress passed the Personal Responsibility and Work Opportunity Act. The heart of the new Act was a new direction in federal funding and in fed­eral purpose. PRWOA was wide-ranging in the changes it brought to welfare, from searching out non-custodial parents to pay child support to the near-elimination of welfare benefits for non­citizens. The heart of PRWOA was the shift in the welfare funding assumption by replacement of Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF). The old AFDC programme was funded by open-ended federal matching payments to the states. The more people added to a state's welfare roll, the greater the federal contribution. Open-ended fed­eral funding was criticized for providing an incen­tive to the states to add clients to their respective welfare rolls, since their share of the costs was often less than half for each client added. Under TANF, the block grant for each state is a fixed amount, with some limited provisions for adjust­ment. States may not use federal funds for clients who have been on the rolls for more than five years. States which help clients leave the rolls through job training or other methods may retain the federal funds that otherwise would have been spent on welfare benefits. Expectations for the states are clear. States over time are expected to see half of the clients on their rolls working at least thirty hours a week, or to reduce the numbers on their rolls. If neither the rolls are reduced nor more clients work, the state runs the risk of a reduction in the size of its block grant. From the mid-1990s until 2001, nearly all states saw a decline in the numbers of residents on welfare. In some states, the decline was massive. Several explanations have been offered for the fall in the numbers. Perhaps the most persuasive explanation is the sustained growth in the economy during the 1990s, but the changes in the rules governing federal fund trans­fers to the states should not be discounted. The capping of federal fund transfers meant that states would not gain additional funds by adding add­itional recipients.

It is clear that states are now participating in a new welfare regime. The new regime does not see welfare as an entitlement, but categorizes welfare payments as short-term funds to help individuals and families during times of economic dislocation. Welfare benefits, under the present model, are designed to bridge periods between jobs. Indeed, states are expected to offer job training programmes in conjunction with welfare benefits. These pro­grammes are designed to help clients to reintegrate or to integrate into the workforce. If states do not offer, or if they greatly reduce, their job training programmes, they run the risk of having their federal funding reduced. It remains to be seen if during a protracted economic downturn the national government will add new funding or re-establish welfare as an entitlement. It should be recognized that welfare in federal-state relations may be closer in image to President Clinton's observation that the era of big government is over. The consequence of capping funding for welfare recipients is a smaller national welfare state. But it is also apparent that federal funding to the states for welfare benefits does still come with clear federal guidelines. The states may vary a great deal in the level of attention they give to training beneficiaries to return to the workplace, but train they must if they wish to receive federal funding. A shift in values is not the same thing as a shift in power from the federal government to the states.

The Bush Era

George W. Bush came into office as the son of a for­mer president, with very wide-ranging connections to a set of former officials who had served his father eight years earlier. His administration boasts con­siderable sophistication about how the national government works. Yet President Bush stressed in his campaign his scepticism about Washington and the federal government, and celebrated both private initiatives and the role of the states. He drew atten­tion to his tenure as governor of Texas to portray what could be accomplished on the state level. The centrepiece of his campaign as the Republican candidate for the presidency was a major reduction in taxes, partially justified on the grounds that the federal government should have fewer funds to spend and, correspondingly, the individual citizen should have more.

True to his platform, President Bush was able to gain congressional support for his substantial tax cut. Although this commitment to reduce taxes was certainly the centrepiece of his programme, it was by no means the only commitment for his presidency. Two other areas have also been para­mount. Education reform is an important part of President Bush's programme, particularly the estab­lishment of a federal commitment to improve writing and mathematical skills for elementary school students. The new federal initiative in elementary education is a major expansion of federal power and federal standards in an area traditionally thought to be the preserve of local, let alone state, governments. Second, a more general commitment to the socially conservative wing of the Republican Party was to deploy federal power in defence of moral issues such as opposition to abortion or to physician-assisted suicide. Oregon's right to die initiative, Measure 16, has been a central target of this commitment. The working assumption is that important moral values should be woven into the national legal framework, not subject to the moral predisposition of individual state choice.

The terrorist attacks of 11 September changed the president's agenda. The attacks inaugurated a time of crisis, when federal authority achieved a prominence that has come to characterize federal government activity in other times of crisis. But this time of crisis should not obscure the fact that in other policy areas the Bush administration had clearly advanced an enhanced role for the federal government before the events of 1.1 September. The two policies just mentioned, education and moral commitment, have generated significant controversy. Both illustrate the pragmatic nature of American federalism: even when rhetoric is sceptical of federal decision-making, the practice may be to enhance the federal role.

In 1994 and again in 1997, Oregon voters approved the Death With Dignity Act—a law permitting physician-assisted suicide. The Act permits a ter­minally ill patient to request a prescription for lethal medication that must be self-administered by the patient, if two doctors clearly conclude that the patient has less than six months to live. Between

1999, when the law went into effect, and 2001, some seventy people had actually taken the overdose. Oregon stands alone in shielding physicians from criminal or civil liability for dispensing controlled substances with the explicit aim of ending a patient's life, under terms of the law. In its 1997 decision in Washington v. Glucksberg, the Supreme Court concluded unanimously that there is no federally protected constitutional right to aid in dying. At the same time, in a panoply of concurring opinions, the justices left a variety of strategies open to the states for dealing with aid in dying.

Under the power to regulate interstate com­merce, the federal government regulates certain drugs through the Controlled Substances Act. The supremacy clause holds that when state laws contra­dict federal laws, federal laws prevail. Opponents of the Oregon law were unable to persuade Oregon voters to defeat physician aid in dying, nor was the initiative struck down by the federal courts. In 1998 Janet Reno, Attorney-General in the DemocraticClinton administration, saw no evidence that Con­gress in the Controlled Substances Act had intended to displace the states as the primary regulators of the medical profession. In November of 2001, however, John Ashcroft, the Republican Attorney-General in the George W. Bush administration, issued an order that the Oregon law violated the Federal Controlled Substance Act (CSA). In April 2002, United States District Judge Robert Jones ruled that Congress had not made explicit in the CSA any intent to regulate the practice of medicine, and that without such explicit indication the statute could not be read to displace such an area of traditional state power. The debate over the Oregon initiative since 1994 has continued unabated but has to some extent now shifted to a debate about federalism: where public policy decisions are to be located. Assisted suicide is now framed as a debate over who gets to make the decision on whether it is to be permitted: the national government or the state of Oregon. Even opponents of the law in Oregon objected to federal intervention in the announced public policy of their state.

Traditionally, primary and secondary education has been the responsibility of local governments, while state universities and colleges have been within the ambit of a state's responsibility. There has been a role for the federal government in education, including setting aside public lands to support public education and establishing land grants for state universities that would provide education for farming communities throughout the nation. During recent decades, American secondary educa­tion has come under criticism for what were judged as limited successes in preparing students for future education and ultimately the workforce, notably in the areas of mathematics and verbal skills. The federal role in primary and secondary education has in large measure been one of providing grants and data analysis. The Federal Department of Education's modest portfolio hardly compares to a European ministry of education. Nonetheless, the depart­ment has still been the subject of serious political challenge for over two decades, as reflected in the Republican Party platform in 1980 that called for the abolition of the department.

In 2000, the Republican Party presidential candi­date, George W. Bush, advocated a stronger role for the federal government in making sure that all the nation's schoolchildren achieve academic pro­ficiency within the coming decade. As president, Bush proposed that states where students were not making adequate yearly progress would risk losing federal education funds. The president's initial proposal requires states to test students in maths and reading every year in grades three to eight. The proposal is entitled `No Child Left Behind', a title chosen to emphasize that the expectation for improved performance extends to all racial and ethnic minorities as well as to the economically disadvantaged. The president's commitment to establishing a strong federal presence in educational achievement was reinforced in the first nine months of his presidency by frequent trips around the country to muster support for the plan. Indeed, on 11 September, the day of the terrorist attack, the president was reading to students in a Florida elementary school.

Critics of the president's educational standardsplan raised challenges within his own party. Repub­lican governors, concerned that diverse students within their respective states raised problems for per­formance standards, lobbied successfully to loosen the requirement that all students reach proficiency. The challenge for the administration remains the extent to which the states are to be held to federal assessment standards or be given much more lati­tude to provide their own standards and assessment methods. Other critics who thought the president's proposals do not go far enough have pressed for additional funds to provide tutors to help dis­advantaged students meet the proposed standards in mathematics and reading.

The bill passed by Congress in December of 2001 and signed into law by President Bush on 8 January 2002 contains at its core the substance of the president's proposals. The new law requires annual testing in reading and maths during grades three to eight. States are expected to narrow the gaps in test performance between poor and wealthy students. If scores for low-income students do not improve, they may receive tutoring or transporta­tion to another school. Schools districts can use fed­eral teacher quality funds for hiring or training teachers. Some funds are set aside for experimental approaches to improved maths and reading per­formance. Public report cards are issued for each school, rating the students' test performance.

It is clear that the federal role in education will be substantial, with the acceptance of what are likely to turn out in practice to be quite precise categorical grants rather than block grants. Education is just one example of how policy commitment drives where policy decision-making is to be placed, rather than a general commitment to states' rights. If the policy objective is the improvement in maths and writing skills of the nation's students, then even an adminis­tration committed to states' rights will centralize educational standards at the national level rather than keeping educational autonomy at the state and local level. The importance of achieving a particular policy objective, even at the expense of states' rights, is not only found in the Education Act but is also apparent in the Bush administration's attempt to halt the use of federally regulated drugs under Oregon's physician-assisted suicide law. Both issues reflect the importance of values and policies in driving the practice of federalism. The commitment to national power or its alternative of granting greater autonomy to the states has much less to do with overarching commitment to a particular conception of federalism and much more to do with the depth of commitment to a specific policy objective.


Federalism is an enduring feature of American politics. Equally enduring is the fact that American federalism is characterized by conflict and change. The understanding of federal—state relations is dif­ferent from what it was a generation ago. It is also different from what it was before the terrorist attacks of 11 September 2001. It is not surprising that change and conflict characterize American federalism, for it is continuously shaped by the courts, acts of Congress, the presidency, and of course the states themselves.

Over the past century, as expectations for govern­ment have expanded and shifted, the qualifying adjectives for federalism have proliferated, from dual to creative to new and new once again. But these are just a few of the ways in which federalism is described. The proliferation of names reflects the unresolved debate in American politics over What federalism is expected to accomplish. Is American federalism a means for a national govern­ment or is it how states cooperate to form a union?

It is in this unending debate that the other core debates of American politics are played out. The search for progressive or traditional policies, the defence of group rights, or the protection of individual rights, shifts from the states to the federal government, and shifts again. These shifts certainly invigorate the debate, although there is a risk that arguments on behalf of the states or federal government can be more rhetorical than substantive. The question of expectations of federal­ism is not answered in large measure because to answer it might rigidify the nation's federal system to such an extent that its capacity to accommodate divisive policy debates or to respond to major crises could be constrained. American federalism in practice has been pragmatic, particularly during the past seventy years, when time and again its very ambiguity has accommodated a remarkable number of quite distinct policy regimes and exhibited in times of crises a formidable ability to concentrate and project power.