American Federalism – Detailed Bullet-Point Notes

Introduction to Federalism

• U.S. Constitution establishes a federal design that balances decentralization (state autonomy) with centralization (national authority).
• Practical differences appear when crossing state lines: taxation, welfare eligibility, voting rules, etc.
• Only the federal level may: print money, set foreign policy, impose nationwide mandates.
• Federalism = mechanism for checks & balances between two electoral levels of government.

The Division of Powers

Definition & Core Characteristics

• Federalism: two autonomous, popularly-elected layers—national & subnational—each acting directly on citizens.
• Five shared traits across the world (U.S., Germany, Mexico):
  • Two elected levels with separate functions.
  • Written constitution changeable only with substantial subnational consent (U.S. needs $\tfrac{2}{3}$ of Congress + $\tfrac{3}{4}$ of states).
  • Specific allocation of legislative, executive, judicial authority.
  • National courts settle inter-level disputes (U.S. Supreme Court is final arbiter).
  • States represented in the national legislature’s upper chamber (two U.S. senators per state).
• Contrasts:
  • Unitary system: subnational units depend on national center (e.g., pre-devolution U.K., France, Japan).
  • Confederation: loose union; national government weak (e.g., U.S. under Articles of Confederation).

Constitutional Logic & Clauses

• Enumerated powers (Art. I §8): tax, borrow, coin money, regulate interstate/foreign commerce, declare war, naturalization, postal system, etc.
• Elastic/Necessary & Proper clause: creates implied powers—authority to enact means “necessary & proper” to fulfill enumerated tasks.
• Commerce clause: broad interpretation has expanded federal reach into intrastate economic activity.
• Reserved powers (10th Amend.): any power not delegated to U.S. nor prohibited to states ⇒ state or people.
• Concurrent powers: shared—tax, borrow, make/enforce laws, establish courts.
• Restrictions:
  • Fed. (Art. I §9): no suspension of habeas corpus, bills of attainder, ex post facto laws.
  • States (Art. I §10): no treaties, coinage, import/export taxes; also bound by rights amendments (14th, 15th, 19th, 26th).
• Supremacy clause (Art. VI): Constitution & federal laws prevail over conflicting state laws.
• Full faith & credit clause (Art. IV §1): states honor other states’ public acts/records (tested in same-sex marriage).
• Privileges & immunities clause (Art. IV §2): prohibits discrimination against out-of-state citizens (voting, tuition, welfare waiting periods are allowed distinctions).

Fiscal Federalism

• FY-2014 revenue: federal $3.2\text{ trillion}$; states $1.7\text{ trillion}$; locals $1.2\text{ trillion}$.
• Key developments:
  • 16th Amendment (1913) → federal income tax capacity.
  • Rise of federal grants (cash transfers) to shape state action.
• Revenue mixes (2013):
  • Federal: $47\%$ individual income tax, $34\%$ payroll taxes.
  • States: $50\%$ taxes (≈$47\%$ sales, $35\%$ income), $30\%$ federal grants.
  • Locals: property tax = $74\%$ of tax base; $37\%$ of revenue from state/federal grants.
• Spending (2014 federal): Social Security $24\%$, Health programs $24\%$, Defense $18\%$, Safety net $11\%$, Debt interest $7\%$, Retirement/vets $8\%$, Transportation $3\%$.

Evolution of American Federalism

Early Struggle (1789–1860s)

• McCulloch v. Maryland (1819): upheld national bank; confirmed implied powers + national supremacy.
• Gibbons v. Ogden (1824): broad view of commerce; federal license supersedes state monopoly.
• Nullification crisis (1832–33): S.C. vs. tariffs; Force Bill asserted federal supremacy.
• Civil War ⇒ ended secession & enforced 14th/15th Amend., shifting power to federal level.

Dual Federalism (c. 1870s–1930s)

• Layer-cake model: clear separation; courts restricted both levels.
• Key rulings: U.S. v. E. C. Knight (1895) limited federal reach into manufacturing; Lochner v. NY (1905) struck labor regulation.

Cooperative (Marble-Cake) Federalism (1930s–1960s)

• New Deal & WWII: federal intervention in social welfare & economy.
• Court-packing threat → NLRB v. Jones & Laughlin (1937) upheld federal labor regulation.
• Great Society (1960s): Medicare, Medicaid, Head Start, education acts, civil rights laws.
• Two legacies: nationalization of politics (larger bureaucracy + grants) & administrative flexibility for states (varied benefits).

New Federalism (1970s–present)

• Nixon: general revenue sharing (minimal strings).
• Reagan: devolution revolution, Omnibus Budget Reconciliation Act 1981 consolidated grants; elimination of revenue sharing 1986.
• Courts: U.S. v. Lopez (1995) limited commerce clause reach.
• Post-9/11 trend back to federal expansion: DHS, TSA, No Child Left Behind, ACA.

Cooperative vs New Federalism

• Cooperative merits: uniform standards, solves collective‐action dilemmas, aids poorer states.
• New Federalism merits: policy diversity, local knowledge, innovation marketplace.

Intergovernmental Relationships

Federal Grants

• Historical shift: land grants → cash grants.
• Types:
  • Categorical (strict rules + matching funds; e.g., Medicaid).
  • Block (broad goals, more flexibility; e.g., Workforce Investment Act).
  • General revenue sharing (1972–86; abolished).
• 2014: $1{,}099$ federal grant programs; $1{,}078$ categorical, $21$ block.
• Health-related grants now >$50\%$ of total (e.g., Medicaid, CHIP).
• Creeping categorization: added requirements erode block flexibility.

Unfunded Mandates

• Mandate = federal “stick”; compel compliance without full funding.
• Crosscutting mandates threaten penalties across programs (e.g., Title VI, Civil Rights Act 1964).
• Partial pre-emption: federal standards + state enforcement (Clean Air Act).
• UMRA 1995 sought to curb mandates, limited success.
• Example: REAL ID Act 2005 → states incur $\approx11\text{ billion}$ cost for secure driver IDs; few fully compliant by 2015.

Competitive Federalism Today

Immigration Federalism

• States enact immigration measures (education, healthcare access, enforcement).
• AZ SB 1070 (2010) “attrition by enforcement” → Arizona v. United States (2012) struck 3/4 provisions; upheld “show me your papers” with caveats on profiling.

Marriage Equality

• 1996 DOMA defined marriage; allowed states to refuse recognition.
• Trend reversed: U.S. v. Windsor (2013) struck federal definition; rapid state-level legalization; Obergefell v. Hodges (2015) established nationwide right.
• Story of Edith Windsor highlighted human impact, influenced public & judicial attitudes.

Venue Shopping & Interest Groups

• MADD failed at states → lobbied Congress → NMDAA 1984 (21-drinking age) via highway grant leverage.
• Anti-abortion advocates shifted from federal to state venues; by 2013, $56\%$ of women lived under restrictive state laws.

Advantages & Disadvantages of Federalism

Benefits

• Encourages political participation (over $510{,}000$ elective offices).
• States act as policy laboratories (Brandeis): e.g., child labor laws, emissions standards.
• Accommodates regional diversity of opinion; multiple venues to pursue policy goals.

Drawbacks

• Economic disparities: 2014 median household income—MD $\$73{,}971$ vs. MS $\$39{,}680$; large gaps in school spending (NY $\$19{,}818$ vs. UT $\$6{,}555$ per pupil).
• Race-to-the-bottom: states cut taxes/regs, harming labor protections & social programs; Medicaid expansion refusal in $19$ states (mostly South).
• Obstruction of national solutions: Court strikes (e.g., early New Deal, 2013 Voting Rights Act decision).

Key Supreme Court Cases (Chronological)

• McCulloch v. Maryland (1819) – implied powers, supremacy.
• Gibbons v. Ogden (1824) – broad commerce.
• Dred Scott v. Sandford (1857) – limited fed power on slavery (later nullified).
• U.S. v. E.C. Knight (1895) – manufacturing outside commerce.
• Lochner v. New York (1905) – struck work-hour cap.
• NLRB v. Jones & Laughlin (1937) – upheld federal labor regulation.
• U.S. v. Lopez (1995) – limited commerce clause (Gun-Free School Zones).
• Arizona v. United States (2012) – fed supremacy in immigration.
• U.S. v. Windsor (2013) – marriage definition; equal protection.
• Obergefell v. Hodges (2015) – constitutional right to same-sex marriage.

Key Statutes & Amendments

• 16th Amend. (1913) income tax.
• Civil Rights Act 1964 (Title VI).
• Voting Rights Act 1965 (key preclearance provision struck 2013).
• UMRA 1995 (Unfunded Mandates).
• REAL ID 2005.
• Affordable Care Act 2010 (Medicaid expansion option).

Essential Vocabulary

• Block, categorical grants; concurrent powers; creeping categorization; devolution; dual vs. cooperative federalism; elastic clause; full faith & credit; privileges & immunities; race-to-the-bottom; unfunded mandate; venue shopping (see definitions above for exam prep).