Evolution of American Federalism

Federalism has evolved as a result of various historical events, such as war and economic crisis; prevailing ideas, values, and beliefs; and government actions shaping the relative power of the federal government and state governments.  Overall, this evolution can be summed up in one sentence: “There have been ebbs and flows in relative power between the federal government and state governments, with the national government eventually gaining ground.”  

Struggle Between National & State Power, 1790s – 1860s

Recall that under the Articles of Confederation, states possessed almost all governing authority, and the federal government had very little power.  It should come as no surprise, then, that immediately following the ratification of the U.S. Constitution, states continued to exercise significant government authority.  States did this through nullification; in other words, if a state deemed a federal law unconstitutional, it would nullify that law within its borders.  This may seem a little odd because it counters the supremacy clause; however, when taken in a historical context, it is understandable why states acted this way.  Nullification was so rampant in the years following the ratification, causing tensions to rise between states and the federal government — one such example of these tensions is the Nullification Crisis during the early 1830s, when President Andrew Jackson threatened to use military force to ensure South Carolina complied with federal tariffs laws.

The federal government was eventually supported in its efforts to exercise its constitutionally authorized powers by the Supreme Court under the leadership of chief justice Marshall through cases such as McCulloch v. Maryland and Gibbons v. OgdenMcCulloch v. Maryland is regarded as the U.S. Supreme Court case that established the doctrine of implied powers (rooted in the elastic clause of the U.S. Constitution) and the doctrine of national supremacy (rooted in the supremacy clause of the U.S. Constitution).  In Gibbons v. Ogden, the Supreme Court legally defined “commerce” as “commercial intercourse among states”, thereby expanding the applicability of the U.S. Constitution’s commerce clause to new areas previously viewed as not falling under the umbrella of federal authority.  Gibbons v. Ogden also reinforced the doctrine of national supremacy established in McCulloch v. Maryland.

Over time, the relative power of the federal government and state governments began to shift as the federal government (including Congress and the judiciary) shifted from the doctrine of nullification to one of preemption, in which state laws that conflicted with federal laws were invalidated.

Civil War & Expansion of National Power

During the Civil War, the power of the federal government expanded significantly.  There are three main reasons for this.

#1:  An Indissoluble Union

Confederate States of America

“If there was any constitutional issue resolved by the Civil War, it was that there is no right to secede.” – Antonin Scalia

The Union victory in the Civil War resulted in the decisive establishment of an indissoluble union.  This was reinforced in Texas v. White (1869), in which the Supreme Court ruled that “individual states could not unilaterally secede from the Union and that the acts of the insurgent Texas legislature–even if ratified by a majority of Texans–were ‘absolutely null'” (Oyez: Texas v. White).  Maintaining an indissoluble union, in turn, required that the national government take steps to maintain this indissoluble union, which leads us to our next point . . .

#2: Civil War Amendments

States that formerly seceded from the United States and joined the Confederate States were required to ratify the Civil War amendments (also referred to as the Reconstruction Amendments), which were viewed as radical expansions of federal power, upon re-entering the United States:

  • 13th Amendment: abolition of slavery
  • 14th Amendment: due process; privileges and immunities; equal protection (which relate to civil liberties and civil rights)
  • 15th Amendment: suffrage / voting rights not prohibited on basis of race, color, or previous condition of servitude

#3:  Presidency & Emergency Powers

“I conceive that I may in an emergency do things on military grounds which cannot be done constitutionally by Congress.” – Abraham Lincoln

The presidency was vastly expanded as a result of the Civil War due largely to Lincoln’s interpretation of Article II of the U.S. Constitution, rooted in his belief that the president could exercise emergency powers not explicitly stated in the U.S. Constitution during times of war.

Dual Federalism, 1870s – 1930s

Dual federalism, also referred to as “layer cake” federalism, refers to the institutional arrangement in which national and state governments are responsible for separate policy areas.  Dual federalism emerged as a result of various Supreme Court decisions and the prevailing economic philosophy at the time.

During the late 1800s and early 1900s, the Supreme Court played an integral role in the emergence of dual federalism by supporting the doctrine of preemption when state governments acted in ways that fell beyond the scope of their constitutional authority.  To better illustrate the role that the Supreme Court played in promoting dual federalism, let’s look at one specific case: Lochner v. New York.

Starting in the 1870s, the U.S. entered the Gilded Age, which was characterized in part by rapid industrialization and economic development.  The overarching economic philosophy at this point (and continuing until the Great Depression at the end of the 1920s) was laissez-faire capitalism or “free market” capitalism, in which the market determines production, distribution, and price decisions, and property is privately owned.  As such, there was relatively little support for government policies that regulated the market sector, particularly if those regulations involved workplace conditions.  This overarching economic philosophy was reflected in the Lochner v. New York decision.

Cooperative Federalism, 1930s – present

Cooperative federalism, also referred to as “marble cake” federalism, refers to the institutional arrangement in which national and state governments share responsibilities for most domestic policy areas.

Cooperative federalism initially emerged following the Great Depression as part of Franklin D. Roosevelt’s New Deal, which expanded the role of the federal government in areas that were traditionally considered to fall under the reserved powers exercised by states relating to the “Three R’s”:  relief for the unemployed and poor, recovery of the economy, and reform of the financial system.Work Pays America poster from New Deal era  Almost all of these programs represented expansions in federal authority and involvement of the federal government in areas traditionally viewed as falling under the reserved powers of the states.  For this reason, many of these policies were initially struck down by the Supreme Court, prompting the discussion of expanding the size of the Supreme Court and resulting in concerns relating to “court packing.”  Furthermore, many of the New Deal programs focused on relief, such as Work Pays America, required cooperation between the federal government, which established and helped fund these programs, and state governments, which were charged with implementing the programs.

At this same time, the prevailing economic philosophy shifted from laissez-faire/free-market capitalism to regulated capitalism, influenced in large part by Keynesian economics.  Regulated capitalism maintains a capitalist economy with freedom from government intervention, but allows government intervention to regulate the economy, guarantee individual rights, and provide procedural guarantees.

As tends to be the case with war, WWII resulted in the expansion of the federal government’s role in various policy areas (particularly that of the executive branch).  In the post-war period, the expansion of the federal government’s role in policy areas continued with the passage of the Civil Rights Act and Voting Rights Act and Lyndon B. Johnson’s Great Society, which resulted in the creation of numerous social welfare programs including Medicaid, HUD housing programs, the Pell Grant, and HeadStart (and, similar to some of the New Deal programs, many of these programs require(d) cooperation and/or funding from both the federal government and state governments).

Regulatory Revolution Stamp: Environmentalism

This general trend of expanding federal authority continued into the 1970s largely due to the advent of the regulatory revolution, during which the federal government took a more active role in regulating commerce and several social, political, and commercial activities (in fact, most of our regulations today stem from the regulatory revolution).

Shifts in Relative Power within the Era of Cooperative Federalism

As you may have gathered, the 1900s marked an era of unprecedented expansion in the size and authority of the federal government.  To suggest that this is the only trend over the past century, however, is inaccurate.

As a result of the growing state share of public spending and public employees and increasing national deficits, the concept of new federalism took root in the early 1970s and continued through the 1990s.  New federalism is based on devolution, in which powers from the central government are delegated to the subnational government.  New federalism had three main goals: (1) enhance administrative efficiency; (2) reduce overall spending; and (3) improve outcomes.

Reinventing Government logo

Several major actors in the federal government supported the concept of new federalism.  Both President Nixon and President Reagan encouraged state autonomy and discretion through utilizing general revenue sharing, which gives states federal monies without telling them how to spend that money.  The Supreme Court under chief justice Rehnquist issued numerous decisions that supported states in the exercise of their reserved powers.  During the 1990s, President Clinton and his administration (democratic party) and the 104th Congress (during which both the U.S. House and U.S. Senate were controlled by the republican party) worked on bipartisan reforms designed to “reinvent government” by expanding bureaucratic discretion and allowing states more flexibility and power when it came to domestic policy areas, including the implementation of certain federal programs.

This trend towards new federalism was reversed, however, following 9/11 and the War on Terror.  These events helped refocus public attention on the national government and resulted in the expansion of the role of the federal government as a result of the creation of the Department of Homeland Security and other executive agencies such as the Transportation Security Administration (before 9/11, states were responsible for the security of their airports – there was no federal agency charged with this function), and the passage of laws such as the PATRIOT ACT.

Struggle Between National and State Power, Revisited: Competitive Federalism

Today, the struggle between national and state power continues.  For this reason, many have stated that we are currently witnessing competitive federalism, in which states and the national government seek to redefine their roles in key policy issues.  Some issues where we have seen this redefinition of roles occur include immigration, marijuana, and abortion.

Local Governing Authority: Dillon’s Rule vs. Home Rule

There are two different legal theories concerning the governing authority of local governments: Dillon’s rule and the Cooley Doctrine (more commonly referred to as the home rule doctrine).  States may apply only Dillon’s rule or home rule to local governments, or they may apply a combination of Dillon’s rule and home rule.  Local governments in most states operate exclusively under Dillon’s rule or a combination of Dillon’s rule and home rule.  Texas local government operates under a combination of Dillon’s rule and home rule.

Direct Link: Home Rule

Dillon’s Rule: State Preemption & Narrow Local Authority

“Municipal corporations owe their origin to, and derive their powers and rights wholly from, the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so may it destroy. If it may destroy, it may abridge and control. ”  – John Forrest Dillon in Clinton v. Center Rapids and the Missouri River Railroad, 1868

According to Dillon’s rule, the state government has authority and supremacy over its respective local governments, which are considered extensions of state government.  Local governments, as extensions of state government, must be structured per state requirements and can only provide those services that the state authorizes them to provide.  “Dillon’s Rule states that if there is a reasonable doubt whether a power has been conferred to a local government, then the power has not been conferred” (National League of Cities, 2016).  Because local governments exist at the pleasure of the state, the state can step in and dissolve them, reorganize them, or take them over.  Furthermore, because local governments are essentially extensions of state government, states are held accountable for the actions taken by their respective local governments.

Dillon’s rule resulted from concerns about local corruption and fiscal irresponsibility.  Dillon’s rule is often viewed as consistent with the principles of federalism outlined in the U.S. Constitution, including a limited federal government and relatively strong states.  “The Founders designed the federal government to be dependent on the states, while the states could stand on their own” (Russell & Bostrom, 2016).  Dillon’s rule extends this dependence on the states to the local level.  As such, federal courts have often ruled in support of this doctrine of governing authority of local governments.

Home Rule: Broad Local Authority

“. . . local government is [a] matter of absolute right; and the state cannot take it away.”  –  Thomas M. Cooley in People v. Hurlbut, 1871

Under the home rule doctrine, local governments have local autonomy and an inherent right to self-government.  Home-rule provisions allow local governments flexibility in addressing the needs of their citizens, without requiring specific delegations of power from the state.  Local governments operating under home rule have some discretion to make decisions about their structure, enact local laws, and make decisions relating to taxation without state interference.  The extent of a local government’s discretion is bound by a state’s constitutional or statutory laws and is often spelled out within a local charter.

During the late 1800s and 1900s, states began to pass legislation and/or include constitutional provisions allowing for home rule in local governments in response to the inability of local governments to respond to increasingly complex problems.

Comparing Dillon’s Rule & Home Rule

Dillon’s rule and home rule are contrasting theories; the advantages of home rule can be seen as offsetting the disadvantages of Dillon’s rule, and vice versa.

Dillon’s Rule

  1. Allows for uniform taxation, environmental regulation, and land use, which benefits businesses
  2. Reduces arbitrary risks that can be taken by local governments
  3. Prevents cities from straying too far from legitimate authority as recognized by the U.S. Constitution
  4. Reduces local corruption

Home Rule

  1. Gives government the ability to make decisions based on local needs, rather than using a one-size-fits-all approach
  2. Provides local control and freedom to self-govern, which may empower citizens
  3. Allows local governments to address financial difficulties by developing new revenue streams
  4. Frees up the state legislature to focus on statewide issues

Judicial Federalism: The Dual Court System

The United States court system is based on judicial federalism, in which judicial authority is shared between levels of government.  The structure of the federal court system is outlined by Article III of the U.S. Constitution and statutory laws passed by Congress.  States are given the authority to establish their own court systems.

State courts hear most day-to-day cases (and approximately 90 percent of all criminal and civil cases).  State courts help the states retain their own sovereignty in judicial matters over their state laws, distinct from the national government.

Federal courts only hear cases that involve a “federal question” *(i.e., involve a federal criminal law, bureaucratic rule, etc., or raise the question whether some law or action violates the U.S. Constitution), interstate matters, and diversity of citizenship matters involving parties of two different states or between a U.S. citizen and a citizen of another nation (with a damage claim of at least $75,000).

State and federal court systems sometimes intersect and overlap each other.  When concurrent jurisdiction exists between the federal and state court systems, there are alternative venues in which someone may appeal for assistance.  Concurrent jurisdiction between federal and state court systems also means that there are different courts in which a person can face charges for a crime or violation.  Double-jeopardy only protects the accused from being tried for the same crime in the same court system; it does not protect the accused from being tried of the same crime in a different court system.

National Influence Over States

Fiscal Federalism

Fiscal federalism refers to the use of grants-in-aid (federal funds allocated to state and local governments) to encourage policies at the state and local levels.  Grants-in-aid have long been used to influence state actions.  The first federal grants-in-aid in the U.S. were during the Articles of Confederation.  The use of grants-in-aid as a mechanism to influence states and local governments expanded as we shifted towards cooperative federalism during the 20th century.  Today, many contemporary facets of federalism involve questions on money and control.

Different types of grants-in-aid have different levels of conditions on aid, which require states to spend grant money in certain ways if they wish to receive federal funding.

Type of Grant-in-Aid Description Conditions-on-Aid?
Categorical Grants Federal aid to states and localities clearly specifying what the money can be used for Yes; high (less state discretion)
Block Grants Federal grants to states to be used for general conditions Yes; low (more state discretion)
General Revenue Sharing Federal aid to states without any conditions on how the money is to be spent No (full state discretion)

Administrative Federalism

Administrative federalism refers to the process whereby the national government sets policy guidelines and then expects state governments to pay for the programs they engender without the use of grants-in-aid.

One of the main tools the federal government uses when engaging in administrative federalism is the unfunded mandate, which imposes federal requirements on state and local governments without providing any monetary aid to meet those requirements.  The federal government can also withhold federal monies (such as reducing the amount of money given to a state through general revenue sharing) to encourage states to adopt certain policies.

Horizontal Federalism: Relations Among States

“The U.S. Constitution . . . creates a constitutional interstate web holding the economic union and the political union together by means of the interstate commerce, full faith and credit, privileges and immunities, interstate compact, and rendition clauses” (Horizontal Federalism, 2011, p. 1).  We refer to these obligations that each state owes to another, as outlined in the U.S. Constitution, as horizontal federalism.

Two important constitutional provisions that help to establish horizontal federalism are found within Article IV of the U.S. Constitution:

Full Faith and Credit Clause (Article IV, § 1): “Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.”

Privileges and Immunities Clause (Article IV, § 2, clause 1):  “The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several states.”

Federalism: Nation & States

The framers of the U.S. Constitution sought to create a limited government in which power was fragmented and divided not only between different institutions (separation of powers) but also between different levels of government (federalism).  

Federal: Enumerated & Implied Powers

The federal government was designed to be one of limited and enumerated powers.  Enumerated powers, which are explicitly listed in the U.S. Constitution, include coining money, regulating interstate commerce, conducting foreign affairs, establishing rules of naturalization, raising and supporting armies, and declaring war.  Congress was also granted implied powers through the elastic clause:

[The Congress shall have Power . . . ] To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Some of the growth in power in the federal government has resulted from broader interpretations of enumerated powers, such as Congress’s power to regulate interstate commerce,  (i.e., commerce clause).  Most of the growth in federal power (and most of what the federal government does today), however, is associated with its implied powers.

States: Reserved Powers

States were designed to be governments of general jurisdiction.  According to the reservation clause, “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”  In other words, states are granted reserved powers, which have traditionally included things such as regulating intrastate commerce, conducting elections, and police powers (i.e., providing for the health, safety, education, and welfare of its people).  This design was meant to give the government closest to the people the means through which action can be taken to address the everyday needs of its people.  Today, many of the states’ reserved powers are no longer under their sole authority.

Federal & States: Concurrent Powers

Concurrent powers are powers that can be exercised by both the federal government and state governments.  Some of the more visible concurrent powers that exist include taxation, borrowing money, making and enforcing laws, and eminent domain.

Restrictions on Federal & State Power

Most restrictions on federal and state authority can be found in Article I, Sections 9 and 10, the Bill of Rights, and the Fourteenth Amendment.