American Federalism: Half-Full or Half-Empty?

Last August the Wall Street Journal noted that some taxpayers were claiming that they did not have to pay federal income tax because they were residents of a state, not the United States. A few weeks earlier the New York Times carried a story describing Vice President Albert Gore?s plan to have detailed positions on a wide range of issues in his quest for the Democratic presidential nomination in 2000. At the top of his list was education, a function not long ago considered a preserve of state and local governments.

Gore?s “blizzard of positions” included preschool for all children, a ban on gang-style clothing, teacher testing, “second-chance” schools for trouble-prone students, back-to-school parent-teacher meetings where a strict discipline code would be signed, and “character education” courses in the schools. Gore proposed to amend the Family and Medical Leave Act to permit parents to attend the parent-teacher meetings during working hours.

As these contrasting conceptions suggest, American federalism is a highly protean form, long on change and confusion, short on fixed, generally accepted principles. In the event, a tax court judge fined the taxpayers who claimed not to be citizens of the United States. And the Times reporter hinted that many actions Gore planned to “require” would need local school board cooperation to take effect.

As the 20th century ends, public commentators often suggest that this is a time of decentralization in the federal system. The view derives mainly from a series of Supreme Court decisions that have sought to rehabilitate the states in constitutional doctrine and from passage of a welfare reform act in 1996 that office-holders and analysts alike interpreted as radically devolutionary.

But matters are more complicated than that. American federalism was born in ambiguity, it institutionalizes ambiguity in our form of government, and changes in it tend to be ambiguous too.

To sort out what is happening, I will distinguish among three spheres of activity: constitutional interpretation by the Supreme Court; electoral politics; and the everyday work of government as manifested in policies and programs.

The Supreme Court

A narrow majority of the Rehnquist Court led by the chief justice attaches importance to preserving federalism. To that end, it has made a series of daring and controversial decisions that purport to limit the powers of Congress or secure constitutional prerogatives of the states.

In Printz v. U.S. (1997) the Court invalidated a provision of the Brady Handgun Violence Prevention Act that required local law enforcement officers to conduct background checks on all gun purchasers. The Court objected that the provision impermissibly violated the Tenth Amendment by commandeering the state government to carry out a federal law. An earlier opinion, New York v. U.S. (1992), had begun to lay the ground for the anticommandeering principle. In another leading case, U.S. v. Lopez (1995), the Court held that Congress had exceeded its commerce clause power by prohibiting guns in school zones. Still other decisions signaled a retreat from federal judicial supervision of school desegregation, prison administration, and the judgments of state courts. Another line of cases has secured the state governments? immunity from certain classes of suits under federal law.

Some analysts profess to see a revolutionary development here, but qualifications are in order. The Court decides many cases in which it does not give primacy to federalism, as for example a 7?2 ruling in 1999 that state welfare programs may not restrict new residents to the welfare benefits they would have received in the states from which they moved. This ruling struck down a California law and by implication a provision of federal law that had authorized it. Moreover, the majority that has decided the leading federalism cases is narrow (often 5?4) and tenuous, inasmuch as it includes some of the oldest members of the Court. The decisions have not exactly been hailed by legal scholars, even some who might be thought sympathetic. Charles Fried of the Harvard Law School, a former solicitor general in the Reagan administration, denounced the series of decisions last June on immunity from suits as “bizarre” and “absurd.”

If this is a revolution, it is one that may not last.

Electoral Politics

Speaker Thomas P. O?Neill?s famous aphorism that “all politics is local” applied to virtually all structural aspects of U.S. electoral politics for a very long time. Determining electoral districts and voter qualifications, mobilizing voters, and financing campaigns were the province mainly of state laws and customs and were locally rooted well into this century. But that has ceased to be true under the impact of 20th-century constitutional amendments extending the electorate, as well as federal statutes and judicial decisions governing apportionment and voting rights. Federal supervision now extends even to such matters as ward-based versus at-large elections in local governments. And changes in technology and in social and economic structures mean that candidates for congressional seats or even lesser offices do not depend exclusively on funds raised from local constituencies. Candidates may get help from party committees and interest groups organized on a national scale.

Nationalization of electoral practices proceeds apace at century?s end. The Motor Voter Act of 1993 requires states to allow all eligible citizens to register to vote when they apply for or renew a driver?s license. It also requires states to allow mail-in registration forms at agencies that supply public assistance, such as welfare checks or help for the disabled. The costs are borne by the states.

Nevertheless, one hesitates to insist that our electoral processes are being comprehensively nationalized at a time when governors seem to have gained an advantage in access to the presidency, growing, arguably, out of the public?s now chronic distrust of the national government. Of the four last presidents in this century, three were governors before they were elected, and in the run-up to the 2000 election, a governor, George W. Bush of Texas, has secured a large and early advantage over other Republican candidates. He owes his success partly to other Republican governors?of whom there were 32 after the election of 1998?who have backed him under the lead of Michigan?s John Engler. To find a presidential nomination that originated in the action of elected state officials, one must go all the way back to 1824, when several state legislatures put forth candidates.

Policies and Programs

It is necessary to be selective because there are so many policies and programs. I will concentrate on three sets?welfare, schools, and criminal justice?that have traditionally been regarded as quite decentralized. Indeed, for decades they constituted the bedrock of local government activity.

The welfare reform legislation of 1996 is everyone?s leading example of decentralization in action. The law converted what had been an open-ended matching grant, with federal funds tied to the number of cases, to a fixed-sum (“block”) grant and explicitly ended individuals? entitlements to welfare. States gained freedom to design their own programs, a change already largely effectuated by White House decisions during the Reagan, Bush, and Clinton administrations to grant waivers of certain federal requirements to individual states. The decentralization of program authority in this case was an important change in intergovernmental relations. Still, its significance must be put in perspective.

Whatever may have happened with welfare in 1996, income support, which is the core function of the modern welfare state, has been largely federalized in the United States in the six decades since 1935. Social Security, Supplemental Security Income (SSI), and food stamps accounted for $431 billion in federal spending in 1998, compared with $22 billion for welfare, now known as TANF (or Temporary Assistance for Needy Families). I pass over the earned income tax credit, weighing in at a volume comparable to that for welfare, a use of federal tax law for income support that would take us too far afield here.

Welfare could be decentralized in 1996 in large part because, unlike income support for the aged and the disabled, it had never been fully centralized. The main change in 1996 was a national policy change that strongly discouraged dependency and certain behavior, especially out-of-wedlock pregnancies and lack of child support from fathers, that had come to be associated with welfare. To carry out this policy change, the new law imposed some stringent federal requirements, such as time limits for receipt of welfare, on the states. Surprisingly, a liberal president and conservative members of the new Republican majority in Congress coalesced in support of legislation, but the national coalition was so frail and incomplete that it became necessary to lodge discretion in the states to achieve a result.

That is one of the traditional functions of American federalism: in the absence of agreement at the national level, discretion can be left to the states. Typically, through inaction by Congress, matters are left with the states, which have initial jurisdiction. What was new in 1996 was that AFDC (Aid to Families with Dependent Children) had become sufficiently centralized in the generation since the mid-1960s that giving discretion to the states required an affirmative act. It required giving back some portion of what had been taken away, as much by federal courts as by Congress. “No more individual entitlement,” the most arresting phrase in the act, was directed at altering relations between Congress and the federal judiciary. I would argue that the law had at least as much significance for what it said about interbranch relations at the federal level as about relations among governments in the federal system.

Elementary and secondary education, far from being off-limits to national politicians as a local matter, has risen to the top of their rhetorical agenda. It took a year for Congress to reauthorize the Elementary and Secondary Education Act in 1993?94. The resulting law consumed 14 titles and 1,200 pages, covering subjects as wide-ranging as academic standards, racial desegregation, language assessments, migrant education, teacher training, math and science equipment, libraries, hate-crime prevention, vouchers, school prayer, sex education, gay rights, gun control, the handicapped, English as a second language, telecommunications, pornography, single-sex schools, national tests, home schooling, drugs, smoking?and more. The level of detail was minute. Any state receiving federal funds had to require that any student who brought a gun to school would be expelled for at least a year. Local officials could, however, modify the requirement on a case-by-case basis. School districts also had to refer offenders to local law enforcement officials. Developmentally disabled students were subject to the expulsion rule, but if school officials established that their behavior was related to their disability, the students could be placed in an alternative educational setting for up to 45 days instead.

In 1999, when the act was again up for reauthorization, Congress by wide margins enacted “Ed-Flex,” the Educational Flexibility Partnership Demonstration Act, which authorized the Secretary of Education to implement a nationwide program under which state educational agencies could apply for waivers of certain federal rules. To be eligible for Ed-Flex, states had to develop educational content and performance standards and procedures for holding districts and schools accountable for meeting educational goals. One could point to this law, of course, as an example of decentralization; members of Congress naturally did so. But in education as in welfare, the subject of waivers would never have arisen had not a vast body of law and regulation developed from which relief had to be sought.

In criminal justice, it remains true that most police and prosecutors are state and local officials. Ninety-five percent of prosecutions are handled by state and local governments. Yet federal criminal law has grown explosively as Congress has taken stands against such offenses as carjacking and church burning, disrupting a rodeo and damaging a livestock facility. A 1999 task force report of the American Bar Association documented and decried this development but is unlikely to stop, let alone reverse it.

The “Mores” of Intergovernmental Relations

In everyday affairs, how do we and our officials think and talk about governments in the federal system? Without having any evidence to support my point, I would argue that citizens and journalists routinely refer to “the government” as if there were only one?the Big One. That this is a country of many governments, though a patent fact, is nonetheless a fact that it takes a pedant or a lawyer to insist on.

Moreover, we are now accustomed to reading that Washington is giving orders to the states, or at least exhorting them to act in regard to one or another matter in which they have been found deficient. Some sample headlines from end-of-century stories in the New York Times would appear very odd to a student of American government who had gone to sleep in, say, 1955 and just awakened: “Clinton to Require State Efforts to Cut Drug Use in Prisons” (January 12, 1998); “White House Plans Medicaid Coverage of Viagra by States” (May 28, 1998); “Clinton to Chide States for Failing to Cover Children” (August 8, 1999). None of this is to say that the states promptly act on orders or admonitions from Washington, only that Washington is accustomed to giving them, without pausing to question the appropriateness of doing so?as is evident from an executive order on federalism that the Clinton administration issued, suspended when state officials angrily protested, and then issued in much revised form.

The offending order, issued in May 1998, contained a set of criteria for policymaking by federal agencies that was broad and inclusive enough invariably to justify federal government action: “(1) When the matter to be addressed by federal action occurs interstate as opposed to being contained within one State?s boundaries. (2) When the source of the matter to be addressed occurs in a State different from the State (or States) where a significant amount of the harm occurs. (3) When there is a need for uniform national standards. (4) When decentralization increases the costs of government thus imposing additional burdens on the taxpayer. (5) When States have not adequately protected individual rights and liberties. (6) When States would be reluctant to impose necessary regulations because of fears that regulated business activity will relocate to other States. . . .” Only the most obtuse and indolent federal administrator could not have put this list to use.

The revised executive order, issued following consultation with state officials, was completely different. The section on policymaking criteria called for “strict adherence to constitutional principles,” avoiding limits on policymaking discretion of the states except with constitutional and statutory authority, granting “maximum administrative discretion” to the states, encouraging states to “develop their own policies to achieve program objectives,” where possible deferring to the states to “establish standards,” consulting with appropriate state and local officials “as to the need for national standards,” and consulting with them in developing national standards when such were found to be necessary.

It is hard to imagine a more complete about-face. It is also hard to know how to interpret the event. One can cite the original order as evidence of the imperious attitudes that high federal officials actually bring to intergovernmental relations, or one can cite the revision as evidence of the continuing power of the states. In studying American federalism, the analyst is forever asking whether the glass is half-empty or half- full. That is the appropriate question as the century turns, and the answers are to be found more in the day-to-day operations of intergovernmental relations than in either Supreme Court decisions or executive orders. It requires a blind eye to call ours an era of devolution. But even with two sharp eyes, it is hard to detect a plain answer. Everywhere one looks, the answer remains murky and many-sided.