A divided sovereignty
Federalism divides authority between a national government and state governments, each with its own sphere and each deriving power from the Constitution and the people. This contrasts with a unitary system, where the central government holds the ultimate power and local governments exist at its discretion (as in France or Japan), and a confederation, where states hold most of the power (the Articles of Confederation).
Who holds what
- Delegated (enumerated) powers belong to the national government: coining money, declaring war, regulating foreign and interstate commerce, running the postal system.
- Reserved powers belong to the states under the 10th Amendment: running schools, regulating most local matters, and the "police power" to protect health, safety and morals.
- Concurrent powers are shared: taxing, borrowing, building roads, running courts.
- States must give full faith and credit to the public acts and court judgments of other states.
Landmark cases
In McCulloch v. Maryland (1819), the Court held that Congress could create a national bank under the necessary and proper clause, and that a state could not tax it. In Gibbons v. Ogden (1824), the Court read the commerce power broadly to cover interstate trade. Over the twentieth century, a broad reading of the commerce clause supported more national regulation. Later cases, such as United States v. Lopez (1995), set some limits.
Changing relationships
Scholars describe dual federalism (until about the 1930s), in which national and state governments largely acted in separate spheres, and cooperative federalism, in which they share tasks and funding. The national government influences states through grants-in-aid:
- Categorical grants are for specific purposes and come with strict conditions.
- Block grants give states broader discretion in a general area.
- Mandates are requirements placed on states, and a mandate that is not paid for is an unfunded mandate.
Why it matters
Supporters say federalism lets states act as "laboratories" for policies, keeps government closer to people and guards against concentrated power. Critics say it can create unequal protection between states and make it harder to solve national problems. Reasonable people differ about the right balance, and the balance has shifted in different eras.
Worked example: a highway grant
- The national government offers a state 90 million dollars for highways if the state meets certain safety standards.
- The grant is categorical, since it is for a specific purpose with conditions.
- The state may refuse, but then loses the money, so the national government has influenced a field (roads) that is mostly state-run.
- If the national government instead gave 90 million with only a general goal, such as "transport", that would be closer to a block grant.
- If the state must also spend its own money to meet a new national rule with no grant, that is an unfunded mandate.
Classifying a policy by who decides, who pays and who sets conditions is the essential skill.