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FEDERALISM
Unit 2
I. U.S. FEDERAL SYSTEM
 Federalism defined:
Powers shared
between the
national government
and the states, but…
 Federal law is
supreme over any
state law when they
conflict.
National v. Federal
Fed Paper #39:
 The government derives all power from the
people and is administered by those elected by
the people for a limited time. It is BOTH
national and federal in design.
 National gov’t represents a union of the states
carrying out expressed powers under the
Constitution on behalf of the nation. It
represents the Union’s “great and aggregate
interests” and the states’ local & particular
powers.
National v. Federal (cont’d)
 Federal gov’t is a confederacy of the
sovereign states and the national
government, each level exercising power and
authority over the same people and territory,
but only within the expressed domains of
their powers.
II.
WHY
FEDERALISM?
A. Serves as part of the checks and balances of our
republic. The unitary British gov’t was all powerful
and viewed with hostility. Sharing powers with
the states reduced the chance of tyranny by the
national government.
B. Framers wanted the two levels of gov’t to help
preserve freedoms, but still maintain order. States
were to have vast reserved powers, but federal
government would have only limited powers
extended to it by the Constitution
C. Framers’ View of Federalism
Key federalists (Hamilton, Madison, Jay,
Franklin, Adams) believed strong national
government to be a protective entity for
the people.
- Prevent “tyranny of the majority”
- Increase citizens’ political participation
- States would be “laboratories” for new
programs and ideas
III.
CONSTITUTIONAL POWERS
 The federal government is divided into 3
branches each holding unique and
complimentary powers as given to them by
the Constitution. These powers are NOT
transferable to another branch except
through a constitutional amendment.
Types of Powers
1. Expressed (enumerated)- Powers written directly into
the Constitution for each branch.
Examples: Declare war, appoint federal judges, control
immigration, coin money, raise an army and navy
2. Implied – Unspecified powers, but needed to carry out
the expressed powers. They may be expanded to intrude upon
the states’ reserved powers if such actions are found to be
“necessary and proper.”
Examples:
- create the Federal Reserve Bank
- institute a military draft
- create a specific tax
The Powers (cont’d)
3. Inherent – self-evident powers each
branch possesses because of what each does
under the Constitution.
- Legislature makes laws
- Executive enforces laws
- Judiciary interprets (reviews) laws
The Powers (cont’d)
4.
Reserved–
Powers left exclusively to the
states under the 10th Amendment that are
not given to the federal gov’t in the USC.
Examples:
- Public education
- Intrastate commerce
- Roads and transportation
- Regulate marriage
- Establish local governments
- Issue licenses
The Powers (cont’d)
5. Concurrent– each level of government
has some similar powers
Examples: levy taxes, borrow money, law
enforcement, establish courts
6. Denied– things that are prohibited to
Congress or the states to do. (Art. I, Sect. 9)
IV. AMENDMENT PROCESS
A. Article V requires supermajorities of Congress and
the states to amend the Constitution.
PROPOSAL VIA:
2/3 vote of the
members of each
house of Congress
RATIFICATION VIA:
3/4 of the state
legislatures directly
ratify changes
Congress calls for a
national convention
proposed by 2/3 of
the states
3/4 of the states’
constitutional
conventions ratify
changes
V. Ideological Definitions
A. Article IV describes
relations among the
states and citizens.
- Guarantees a
republican form of
gov’t to the states.
- States have
sovereignty on many
issues as per 10th
Amendment.
B. Supremacy clause
(Article VI) makes state
law and policies
subordinate to federal
law when they conflict.
- Forces compromise
to be reached between
both levels.
Dual Federalism (1835-1932)
• The relationship between
the national government
and the states as seen by
the Framers. Both levels
are supreme in their own
sphere of power and are
not to interfere with the
other’s.
• Federal government has
limited scope and purpose
through its expressed
powers only; states have
large number of reserved
powers not given to the
national gov’t.
Ideological Definitions (cont’d)
A metaphor for the idea of
Dual Federalism is the ...
Layer cake
Each level of government is
supreme in its own area, but
some areas are concurrently
shared (shown by the middle
layer).
COOPERATIVE FEDERALISM
(1933-1980)
The concept that the people are both citizens of
the U.S. and their state concurrently so
functions between the state and national
governments overlap. Spheres of power are
blurred.
1. Many federal and state functions are now
cooperatively undertaken (e.g. transportation,
schools, prisons, welfare) and Feds and states
share powers anyhow (police, taxes, health
care, etc.).
2. Tax money should be returned to the states
to improve public services (New Deal programs).
Cooperative Federalism (cont)


In the 1960s and 1970s the federal government directly
funded massive social programs designed to promote
“equality of outcome.”
The money given to the states for their implementation
often bypassed state approval and was mandatory.
Examples: the Great Society and the War on Poverty
provided welfare, public housing, Medicare/Medicaid,
school lunch programs, etc.
Cooperative Federalism

The marble cake is
a good metaphor
for cooperative
federalism.
NEW FEDERALISM-1980s
 The return of more power
and authority back to the
states by reformulating
revenue sharing programs
and by cutting or eliminating
federal programs.
 President Reagan used New
Federalism to redress the
balance of power between
Washington and the states
and successive Presidents
have embraced this model.
 How did it work?
- States would administer
most federal programs such
as job training, Welfare,
Medicaid, urban
development, etc. and
experiment with running
them more efficiently.
- This is called devolution.
 Results: Lessened federal
rules and control over states,
but greater costs for the
states in helping pay for
government services.
What About Today?

Since 2009, the Obama
administration has
consistently tried to
undermine state powers
through increased numbers of
mandatory federal programs
and policies, threatening
sanctions on states to
pressure their compliance, or
taking states to court to force
their acceptance.
 Perhaps the metaphor for this
style of federalism should be
the FRUIT CAKE.
Horizontal Federalism
The relationship of the states to each other
as required by Article IV of the Constitution:
1. Full Faith and Credit Clause
- The states must accept the legal
documents, records, public acts and judicial
decisions of each other.
Ex: marriages, divorces (some), adoptions,
titles to property, convictions, lawsuit results, etc.
- Some exceptions allowable when laws
between states conflict
2. Privileges and Immunities Clause
- Citizens do not forfeit certain rights just
because they cross state lines. They shall have
the same privileges as citizens of the other
states, such as owning property there, living
and travelling in those states, and using their
courts.
- However, states may legally discriminate
against citizens of other states in certain areas
such as:
- out-of-state tuition
- driver licenses
- professional licensing
- voting and holding office qualifications
3. Extradition
- A person fleeing from justice from one state
to another shall be returned to the state having
jurisdiction of the crime.
4. Interstate compacts
- States must try and work out their differences
with one another by formal agreements. The
Supreme Court will be a neutral arbiter if the
states cannot come to agreement.
VI. IDEOLOGICAL ARGUMENTS
A. Conservatives believe that…
- federal control over states should be lessened;
devolution is the best federal-state relationship.
- states are more sensitive to citizen’s needs;
let the states, not the feds, determine how
grant money is to be used.
- there should be less costs to the states in
administering federal grant money.
- making states pay for federal mandates is an
unjust exercise of power.
B. Liberals believe that…
- states don’t have the resources, expertise, or willingness
to do the job.
- the federal government should be the watchdog for
state compliance with federal regulations.
- states are too narrow-minded and don’t care about the
needs of the nation and will therefore resist raising
necessary revenues through taxes.
- federally controlled social programs are individual
rights. (e.g. Medicare, Social Security, food stamps,
national healthcare).
C. Refereeing Federalism
The Supreme Court has been used by
both the conservative and liberal factions
in government to advance their views of
federalism. Both believe judicial activism
should be used to overturn a state law or
action they don’t like or that the Court
should use judicial restraint if they agree
with those laws.
D. BUSH v. GORE (2000)

VII. EARLY FEDERAL SUPREMACY CASES
McCulloch v. Maryland (1819)
Issue #1: Does Congress have
power under the Constitution to
create a national bank?
Answer: Yes. The federal gov’t
derives its authority from the
“people”, not the states. “It is
the gov’t of all, its powers are
delegated by all, it represents
and acts for all.”
-The federal gov’t is accountable
to the citizens, not the states.
The Bank was created under
Congress’s implied powers to
“promote the general welfare.”
McCulloch v. Maryland (cont’d)
Issue #2: Can a state
tax an institution of
the Federal gov’t?
 Answer: No. Federal
law is supreme over
any state law when
the laws of both
conflict.

“The power to tax is the
power to destroy.”

Gibbons v. Ogden (1824)
The first challenge to the federal government’s expressed
power to regulate interstate commerce (Commerce
clause).
Issue 1: What does the term “commerce” include?
Issue 2: Did federal authority under the commerce clause
extend within the waters of state boundaries? Is its
authority overlapping here?
Issue 3: Did New York monopoly law conflict with federal
law?
Gibbons v. Ogden (cont’d)
 Marshall – (1) Commerce is not just the buying and selling of
goods, but their transportation too.
(2) When state regulations have any tendency to conflict with
federal control, the federal position is supreme. New York
monopoly law is therefore void.

Marshall - States have a part in regulating interstate commerce
in the absence of federal authority however, “navigation” is
part of commerce and that is under federal supremacy so
Gibbons’ federal license takes precedence. U.S. has the power
to regulate commerce going through states as well as between
them.
BARRON v. BALTIMORE (1833)
 Issue: Was John Barron
duly deprived of his 5th
Amendment property rights
because the city of
Baltimore refused to pay
him for rendering his wharf
unusable due to city
actions, and therefore
ruining his ability to conduct
business?
Barron v. Baltimore (cont’d)
 Decision: No. The Court said that the 5th
Amendment in eminent domain cases does not
apply to the states, only to the federal
government. The Bill of Rights nowhere limits
the actions of state governments (a strict
interpretation) and thus the USSC had no
jurisdiction to rule on the case.
 After the 14th Amendment passed in 1868,
most of the Bill of Rights was seen as applying
to the states as well (“equal protection” clause).
Today, Barron probably would win his case.
D. Property Rights
1. 5th Amendment’s eminent domain power
(Takings clause) allows the government to
seize private property under two conditions:
- Must be for “public use.”
- Owner must be given a fair price in
exchange.
2. During time of war the gov’t may take property
deemed essential for the war effort:
(e.g. ships/boats for naval use; factories for
war goods productions; higher tax rates on
income)
Kelo v. New London (2005)
• The City of New London
wanted to condemn a lower
class neighborhood, with
no blight, and give it to a
land developer who would
raze it and build high value
townhomes on the same
sight which would raise
more property tax revenue
that could be used to pay
for critical city needs.
Kelo v. New London (cont’d)
• Issue: Can local gov’t use its
eminent domain power to
seize private property and
give it to another private entity
for the “public good”? The
Constitution says “public use”,
not “public good.”
• Decision: Yes, according to
the USSC. The increased
taxes would have direct public
benefit so therefore “public
good” was synonymous with
“public use.”
Heart of Atlanta Motel v. U.S. (1964)
Issue #1:
Is the Civil Rights Act of 1964
constitutional?
Yes. Congress has the right
to regulate interstate trade
within a state on businesses
that have a direct and
substantial relation to the
interstate flow of goods and
people.
“The power of Congress to
promote such commerce
also includes the power to
regulate local incidents
thereof.”
Heart of Atlanta Motel (cont’d)
Issue #2: What constitutes interstate trade
and what is its true scope?
- Movement of people and goods
through states. Public accommodation is
therefore also included as interstate
commerce.
Issue #3: Can the federal government prohibit
segregated public accommodations even on
private property?
- Yes. Segregation places a burden on
some citizens and therefore interferes with
commerce through practices harmful to
trade. It also violates the 14th Amendment’s
Equal protection clause.
- To some degree it also violates the ability
of people to move freely through the states.
It is the right of Congress to legislate as
necessary and proper” under implied powers.
IX. FEDERALISM: THE HEART OF
TAXING AND SPENDING
A. What is “revenue”?
- Any money obtained by the government
through taxes, loans, interest, etc.
- 2012 federal budget was $3.7 trillion with a
$1.3 trillion deficit; our GDP was $15 trillion;
our 2012 national debt is $16.2 trillion as of
Sept. 2012 (was $500 billion in 1980)
B. Federal taxes are redistributed back to the
states for assistance programs. Poor states
get back more per capita than rich states.
C. Grants-in-aid: Return of federal money gathered
from all 50 states and then given back to the states for
funding & implementing federal programs and state
projects based on need.
D. Types of Federal Grants
1. Categorical: Federal aid that targets specific
needs of the states and has strict restrictions and
conditions placed on them by the U.S. gov’t.
* Favored by Democrats who believe Feds should
fully control money given to states.
Types of Categorical Grants

Formula Grants
- How much each state
gets from money allocated
to a specific program is
based on a cost-sharing /
matching formula
between Feds and states
(e.g. hi-way construction;
Medicaid, public housing
construction)

Project grants
- Awarded on the basis
of competitive state
applications for the
performance of a specific
task or function.
(e.g. cancer research,
education initiatives,
employment of homeless,
toxic waste cleanup)
2. Block Grants
- Federal money given to states with very few
“strings” attached for broad-based issues (e.g.
healthcare; transportation, education). States
have wide discretion to use the funds as they see
fit.
- Republicans mostly favor block grants so
states can decide how best to use the money.
* Pros: States may be able to innovatively
use money in cost effective ways (laboratories!)
* Cons: Lack of federal oversight on funds
may lead to waste, duplication, or fraud.
E. HOW FEDERALISM WORKS FOR US
1. Equalizes financial resources between rich and
poor states thus saving U.S. government $$.
2. Allows unity without uniformity. One state’s
needs are not another’s (Florida doesn’t need
help clearing snow, but may need hurricane
disaster help; Ohio doesn’t need oil spill
cleanup money, but Louisiana could).
3. States can experiment with programs and
decide what works best for their citizens and
budgets.
X. GRANTS = CONTROL OVER STATES
Direct orders (mandates)States must do some
required action or refrain
from taking certain
actions. Failure to
comply can result in
penalties on a state.
(Example: Clean up your
waters and air or be fined
or your businesses
shutdown.)
PREEMPTION
When federal laws or
regulations totally or
partially end up taking
responsibility for a state
gov’t function thereby
restricting state powers
(Ex: No state taxing of
the Internet = total
preemption)
(Ex: Do Not Call Act;
REAL ID Act = partial
preemptions)
Cross-over Sanctions
Withholding grant
money for one funded
program by forcing
states to meet the
conditions of another
program.
(Example: Increase
your state drinking
age or lose federal
highway funding.)
D. UNFUNDED MANDATES
Examples:
The Federal government
makes regulations for
programs that it requires
states to implement at
their own cost.
- Pollution cleanup
- Provide services for illegal
aliens and the poor in your
schools/hospitals, provide
food stamps, etc.)
- Auto emissions standards
- NO CHILD LEFT BEHIND
(partially funded mandate)
Unfunded mandates banned in 1996 under the
Unfunded Mandates Reform Act. So, how does
Congress get away with still enacting them?


By writing mandates so
precisely that many things
can fall out of its scope.
Stating that mandates
placed on state/local gov’ts
over $50 million, and those
over $100 million that are
placed on businesses are
exempt from funding.


Creating anti-discrimination laws that are
exempt from mandate funding.
(e.g. Americans With Disabilities Act)
Spreading mandates out over many years
and not including inflationary protection
such as anti-terrorism and ObamaCare.
End of Unit 2
QUESTIONS?