Ch 3 - Textbook - American Government 3e

American Federalism 3
FIGURE 3.1 Your first encounter with differences across states may have come from visiting relatives or going on a
cross-country trip with your parents during vacation. The distinct postcard images of different states that come to
your mind are symbolic of American federalism. (credit: modification of work by Boston Public Library)
CHAPTER OUTLINE
3.1 The Division of Powers
3.2 The Evolution of American Federalism
3.3 Intergovernmental Relationships
3.4 Competitive Federalism Today
3.5 Advantages and Disadvantages of Federalism
INTRODUCTION Federalism figures prominently in the U.S. political system. Specifically, the federal design
spelled out in the Constitution divides powers between two levels of government—the states and the federal
government—and creates a mechanism for them to check and balance one another. As an institutional design,
federalism both safeguards state interests and creates a strong union led by a capable central government.
American federalism also seeks to balance the forces of decentralization and centralization. We see
decentralization when we cross state lines and encounter different taxation levels, welfare eligibility
requirements, and voting regulations. Centralization is apparent in the fact that the federal government is the
only entity permitted to print money, to challenge the legality of state laws, or to employ money grants and
mandates to shape state actions. Colorful billboards with simple messages may greet us at state borders
(Figure 3.1), but behind them lies a complex and evolving federal design that has structured relationships
between states and the federal government since the late 1700s.
What specific powers and responsibilities are granted to the federal and state governments? How does our
process of government keep these separate governing entities in balance? To answer these questions and
more, this chapter traces the origins, evolution, and functioning of the American system of federalism, as well
as its advantages and disadvantages for citizens.
66 3 • American Federalism

LEARNING OBJECTIVES
By the end of this section, you will be able to:
• Explain the concept of federalism
• Discuss the constitutional logic of federalism
• Identify the powers and responsibilities of federal, state, and local governments
Modern democracies divide governmental power in two general ways; some, like the United States, use a
combination of both structures. The first and more common mechanism shares power among three branches
of government—the legislature, the executive, and the judiciary. The second, federalism, apportions power
between two levels of government: national and subnational. In the United States, the term federal government
refers to the government at the national level, while the term states means governments at the subnational
level.
FEDERALISM DEFINED AND CONTRASTED

Federalism is an institutional arrangement that creates two relatively autonomous levels of government, each
possessing the capacity to act directly on behalf of the people with the authority granted to it by the national
constitution.1 Although today’s federal systems vary in design, five structural characteristics are common to
the United States and other federal systems around the world, including Germany and Mexico.
First, all federal systems establish two levels of government, with both levels being elected by the people and
each level assigned different functions. The national government is responsible for handling matters that
affect the country as a whole, for example, defending the nation against foreign threats and promoting national
economic prosperity. Subnational, or state governments, are responsible for matters that lie within their
regions, which include ensuring the well-being of their people by administering education, health care, public
safety, and other public services. By definition, a system like this requires that different levels of government
cooperate, because the institutions at each level form an interacting network. In the U.S. federal system, all
national matters are handled by the federal government, which is led by the president and members of
Congress, all of whom are elected by voters across the country. All matters at the subnational level are the
responsibility of the fifty states, each headed by an elected governor and legislature. Thus, there is a separation
of functions between the federal and state governments, and voters choose the leader at each level.2
The second characteristic common to all federal systems is a written national constitution that cannot be
changed without the substantial consent of subnational governments. In the American federal system, the
twenty-seven amendments added to the Constitution since its adoption were the result of an arduous process
that required approval by two-thirds of both houses of Congress and three-fourths of the states. The main
advantage of this supermajority requirement is that no changes to the Constitution can occur unless there is
broad support within Congress and among states. The potential drawback is that numerous national
amendment initiatives—such as the Equal Rights Amendment (ERA), which aims to guarantee equal rights
regardless of sex—have failed because they cannot garner sufficient consent among members of Congress or,
in the case of the ERA, the states. The ERA appeared to gain new life in 2020 as a thirty-eighth state (Virginia)
formally voted to ratify the amendment. Although the amendment's original ratification deadline was in 1982,
the U.S. House of Representatives has passed legislation to extend the deadline; however, the Senate has not
taken up the measure.3
Third, the constitutions of countries with federal systems formally allocate legislative, judicial, and executive
authority to the two levels of government in such a way as to ensure each level some degree of autonomy from
the other. Under the U.S. Constitution, the president assumes executive power, Congress exercises legislative
powers, and the federal courts (e.g., U.S. district courts, appellate courts, and the Supreme Court) assume
judicial powers. In each of the fifty states, a governor assumes executive authority, a state legislature makes
laws, and state-level courts (e.g., trial courts, intermediate appellate courts, and supreme courts) possess
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3.1 • The Division of Powers 67
judicial authority.
While each level of government is somewhat independent of the others, a great deal of interaction occurs
among them. In fact, the ability of the federal and state governments to achieve their objectives often depends
on the cooperation of the other level of government. For example, the federal government’s efforts to ensure
homeland security are bolstered by the involvement of law enforcement agents working at local and state
levels. On the other hand, the ability of states to provide their residents with public education and health care
is enhanced by the federal government’s financial assistance.
Another common characteristic of federalism around the world is that national courts commonly resolve
disputes between levels and departments of government. In the United States, conflicts between states and the
federal government are adjudicated by federal courts, with the U.S. Supreme Court being the final arbiter. The
resolution of such disputes can preserve the autonomy of one level of government, as illustrated recently when
the Supreme Court ruled that states cannot interfere with the federal government’s actions relating to
immigration.4 In other instances, a Supreme Court ruling can erode that autonomy, as demonstrated in the
1940s when, in United States v. Wrightwood Dairy Co., the Court enabled the federal government to regulate
commercial activities that occurred within states, a function previously handled exclusively by the states.5
Finally, subnational governments are always represented in the upper house of the national legislature,
enabling regional interests to influence national lawmaking.6 In the American federal system, the U.S. Senate
functions as a territorial body by representing the fifty states: Each state elects two senators to ensure equal
representation regardless of state population differences. Thus, federal laws are shaped in part by state
interests, which senators convey to the federal policymaking process.
LINK TO LEARNING
The governmental design of the United States is unusual; most countries do not have a federal structure. Aside
from the United States, how many other countries (https://openstax.org/l/29fedsystems) have a federal
system?
Division of power can also occur via a unitary structure or confederation (Figure 3.2). In contrast to federalism,
a unitary system makes subnational governments dependent on the national government, where significant
authority is concentrated. Before the late 1990s, the United Kingdom’s unitary system was centralized to the
extent that the national government held the most important levers of power. Since then, power has been
gradually decentralized through a process of devolution, leading to the creation of regional governments in
Scotland, Wales, and Northern Ireland as well as the delegation of specific responsibilities to them. Other
democratic countries with unitary systems, such as France, Japan, and Sweden, have followed a similar path of
decentralization.
FIGURE 3.2 There are three general systems of government—unitary systems, federations, and
confederations—each of which allocates power differently.
In a confederation, authority is decentralized, and the central government’s ability to act depends on the
consent of the subnational governments. Under the Articles of Confederation (the first constitution of the
United States), states were sovereign and powerful while the national government was subordinate and weak.
Because states were reluctant to give up any of their power, the national government lacked authority in the
face of challenges such as servicing the war debt, ending commercial disputes among states, negotiating trade
agreements with other countries, and addressing popular uprisings that were sweeping the country. As the
brief American experience with confederation clearly shows, the main drawback with this system of
government is that it maximizes regional self-rule at the expense of effective national governance.
FEDERALISM AND THE CONSTITUTION

The Constitution contains several provisions that direct the functioning of U.S. federalism. Some delineate the
scope of national and state power, while others restrict it. The remaining provisions shape relationships
among the states and between the states and the federal government.
The enumerated powers of the national legislature are found in Article I, Section 8. These powers define the
jurisdictional boundaries within which the federal government has authority. In seeking not to replay the
problems that plagued the young country under the Articles of Confederation, the Constitution’s framers
granted Congress specific powers that ensured its authority over national and foreign affairs. To provide for
the general welfare of the populace, it can tax, borrow money, regulate interstate and foreign commerce, and
protect property rights, for example. To provide for the common defense of the people, the federal government
can raise and support armies and declare war. Furthermore, national integration and unity are fostered with
the government’s powers over the coining of money, naturalization, postal services, and other responsibilities.
The last clause of Article I, Section 8, commonly referred to as the elastic clause or the necessary and proper
clause, enables Congress “to make all Laws which shall be necessary and proper for carrying” out its
constitutional responsibilities. While the enumerated powers define the policy areas in which the national
government has authority, the elastic clause allows it to create the legal means to fulfill those responsibilities.
However, the open-ended construction of this clause has enabled the national government to expand its
authority beyond what is specified in the Constitution, a development also motivated by the expansive

interpretation of the commerce clause, which empowers the federal government to regulate interstate
economic transactions.
The powers of the state governments were never listed in the original Constitution. The consensus among the
framers was that states would retain any powers not prohibited by the Constitution or delegated to the national
government.7 However, when it came time to ratify the Constitution, a number of states requested that an
amendment be added explicitly identifying the reserved powers of the states. What these Anti-Federalists
sought was further assurance that the national government’s capacity to act directly on behalf of the people
would be restricted, which the first ten amendments (Bill of Rights) provided. The Tenth Amendment affirms
the states’ reserved powers: “The 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.” Indeed, state constitutions had bills
of rights, which the first Congress used as the source for the first ten amendments to the Constitution.
Some of the states’ reserved powers are no longer exclusively within state domain, however. For example,
since the 1940s, the federal government has also engaged in administering health, safety, income security,
education, and welfare to state residents. The boundary between intrastate and interstate commerce has
become indefinable as a result of broad interpretation of the commerce clause. Shared and overlapping powers
have become an integral part of contemporary U.S. federalism. These concurrent powers range from taxing,
borrowing, and making and enforcing laws to establishing court systems (Figure 3.3).8
FIGURE 3.3 Constitutional powers and responsibilities are divided between the U.S. federal and state governments.
The two levels of government also share concurrent powers.
Article I, Sections 9 and 10, along with several constitutional amendments, lay out the restrictions on federal
and state authority. The most important restriction Section 9 places on the national government prevents
measures that cause the deprivation of personal liberty. Specifically, the government cannot suspend the writ
of habeas corpus, which enables someone in custody to petition a judge to determine whether that person’s
detention is legal; pass a bill of attainder, a legislative action declaring someone guilty without a trial; or enact
an ex post facto law, which criminalizes an act retroactively. The Bill of Rights affirms and expands these
constitutional restrictions, ensuring that the government cannot encroach on personal freedoms.
The states are also constrained by the Constitution. Article I, Section 10, prohibits the states from entering into
treaties with other countries, coining money, and levying taxes on imports and exports. Like the federal
government, the states cannot violate personal freedoms by suspending the writ of habeas corpus, passing
bills of attainder, or enacting ex post facto laws. Furthermore, the Fourteenth Amendment, ratified in 1868,
prohibits the states from denying citizens the rights to which they are entitled by the Constitution, due process
of law, or the equal protection of the laws. Lastly, three civil rights amendments—the Fifteenth, Nineteenth, and
Twenty-Sixth—prevent both the states and the federal government from abridging citizens’ right to vote based
on race, sex, and age. This topic remains controversial because states have not always ensured equal
protection.
The supremacy clause in Article VI of the Constitution regulates relationships between the federal and state
governments by declaring that the Constitution and federal law are the supreme law of the land. This means
that if a state law clashes with a federal law found to be within the national government’s constitutional
authority, the federal law prevails. The intent of the supremacy clause is not to subordinate the states to the
federal government; rather, it affirms that one body of laws binds the country. In fact, all national and state
government officials are bound by oath to uphold the Constitution regardless of the offices they hold. Yet
enforcement is not always that simple. In the case of marijuana use, which the federal government defines to
be illegal, thirty-six states and the District of Columbia have nevertheless established medical marijuana laws,
others have decriminalized its recreational use, and fifteen states have completely legalized it. The federal
government could act in this area if it wanted to. For example, in addition to the legalization issue, there is the
question of how to treat the money from marijuana sales, which the national government designates as drug
money and regulates under laws regarding its deposit in banks.
Various constitutional provisions govern state-to-state relations. Article IV, Section 1, referred to as the full
faith and credit clause or the comity clause, requires the states to accept court decisions, public acts, and
contracts of other states. Thus, an adoption certificate or driver’s license issued in one state is valid in any
other state. The movement for marriage equality has put the full faith and credit clause to the test in recent
decades. In light of Baehr v. Lewin, a 1993 ruling in which the Hawaii Supreme Court asserted that the state’s
ban on same-sex marriage was unconstitutional, a number of states became worried that they would be
required to recognize those marriage certificates.9 To address this concern, Congress passed and President
Clinton signed the Defense of Marriage Act (DOMA) in 1996. The law declared that “No state (or other political
subdivision within the United States) need recognize a marriage between persons of the same sex, even if the
marriage was concluded or recognized in another state.” The law also barred federal benefits for same-sex
partners.
DOMA clearly made the topic a state matter. It denoted a choice for states, which led many states to take up the
policy issue of marriage equality. Scores of states considered legislation and ballot initiatives on the question.
The federal courts took up the issue with zeal after the U.S. Supreme Court in United States v. Windsor struck
down the part of DOMA that outlawed federal benefits.10 That move was followed by upwards of forty federal
court decisions that upheld marriage equality in particular states. In 2014, the Supreme Court decided not to
hear several key case appeals from a variety of states, all of which were brought by opponents of marriage
equality who had lost in the federal courts. The outcome of not hearing these cases was that federal court
decisions in four states were affirmed, which, when added to other states in the same federal circuit districts,
brought the total number of states permitting same-sex marriage to thirty.11 Then, in 2015, the Obergefell v.
Hodges case had a sweeping effect when the Supreme Court clearly identified a constitutional right to
marriage based on the Fourteenth Amendment.12
The privileges and immunities clause of Article IV asserts that states are prohibited from discriminating
against out-of-staters by denying them such guarantees as access to courts, legal protection, property rights,
and travel rights. The clause has not been interpreted to mean there cannot be any difference in the way a state
treats residents and non-residents. For example, individuals cannot vote in a state in which they do not reside,
tuition at state universities is higher for out-of-state residents, and in some cases individuals who have

recently become residents of a state must wait a certain amount of time to be eligible for social welfare
benefits. Another constitutional provision prohibits states from establishing trade restrictions on goods
produced in other states. However, a state can tax out-of-state goods sold within its borders as long as state-
made goods are taxed at the same level.
THE DISTRIBUTION OF FINANCES

Federal, state, and local governments depend on different sources of revenue to finance their annual
expenditures. In 2014, total revenue (or receipts) reached $3.2 trillion for the federal government, $1.7 trillion
for the states, and $1.2 trillion for local governments.13 Two important developments have fundamentally
changed the allocation of revenue since the early 1900s. First, the ratification of the Sixteenth Amendment in
1913 authorized Congress to impose income taxes without apportioning it among the states on the basis of
population, a burdensome provision that Article I, Section 9, had imposed on the national government.14 With
this change, the federal government’s ability to raise revenue significantly increased and so did its ability to
spend.
The second development regulates federal grants, that is, transfers of federal money to state and local
governments. These transfers, which do not have to be repaid, are designed to support the activities of the
recipient governments, but also to encourage them to pursue federal policy objectives they might not
otherwise adopt. The expansion of the federal government’s spending power has enabled it to transfer more
grant money to lower government levels, which has accounted for an increasing share of their total revenue.15
The sources of revenue for federal, state, and local governments are detailed in Figure 3.4. Although the data
reflect 2020 results, the patterns we see in the figure give us a good idea of how governments have funded their
activities in recent years. For the federal government, 47 percent of 2020 revenue came from individual
income taxes and 38 percent from payroll taxes, which combine Social Security tax and Medicare tax.
FIGURE 3.4 As these charts indicate, federal, state, and local governments raise revenue from different sources.
For state governments, 39 percent of revenue came from taxes, while 25 percent consisted of federal support.
Sales tax—which includes taxes on purchased food, clothing, alcohol, amusements, insurance, motor fuels,
tobacco products, and public utilities, for example—accounted for about 47 percent of total tax revenue, and
individual income taxes represented roughly 38 percent. Revenue from service charges (e.g., tuition revenue
from public universities and fees for hospital-related services) accounted for 15 percent.
The tax structure of states varies. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming do
not have individual income taxes. Yet, such decisions on taxation reflect a classic tradeoff, as each state
government must collect some mix of revenue in order to fund their chosen public services. These states find
revenue through higher property taxes and through tax revenues related to tourism. Figure 3.5 illustrates yet
another difference: Fuel tax as a percentage of total tax revenue is much higher in South Dakota and West
Virginia than in Alaska and Hawaii. However, most states have done little to prevent the erosion of the fuel tax’s
share of their total tax revenue between 2007 and 2009 (notice that for many states the dark blue dots for 2010
are to the left of the light blue numbers for 2007). Fuel tax revenue is typically used to finance state highway
transportation projects, although some states do use it to fund non-transportation projects.

FIGURE 3.5 The fuel tax as a percentage of tax revenue varies greatly across states.
The most important sources of revenue for local governments in 2018 were taxes, federal and state grants, and
service charges. For local governments the property tax, a levy on residential and commercial real estate, was
the most important source of tax revenue, accounting for about 72 percent of the total. Federal and state grants
accounted for 30 percent of local government revenue. Charges for hospital-related services, sewage and solid-
waste management, public city university tuition, and airport services are important sources of general
revenue for local governments.
Intergovernmental grants are important sources of revenue for both state and local governments. When
economic times are good, such grants help states, cities, municipalities, and townships carry out their regular
functions. However, during hard economic times, such as the Great Recession of 2007–2009,
intergovernmental transfers provide much-needed fiscal relief as the revenue streams of state and local
governments dry up. During the Great Recession, tax receipts dropped as business activities slowed, consumer
spending dropped, and family incomes decreased due to layoffs or work-hour reductions. To offset the adverse
effects of the recession on the states and local governments, federal grants increased by roughly 33 percent
during this period.16
The COVID-19 pandemic of 2020–2021 ushered in a massive mobilization of activity and coordination at and
between various levels of U.S. government in the hope of defeating the deadly virus that overwhelmed
hospitals and led to nearly 600,000 deaths nationwide as well as a bleeding of state and local government jobs.
The amount of federal funding to the states eclipsed the levels provided during the Great Recession. The $1.9
trillion American Rescue Plan Act passed by Congress and signed by President Biden included $350 million in
direct aid to state, local, and tribal governments.17 Furthermore, earlier in the pandemic, the CARES Act,
signed by President Trump, established the $150 billion Coronavirus Relief Fund to aid these same
governments. Many other federal funding flows occurred outside these two packages, including support for
vaccinations and the vaccine rollout across the nation.18
How are the revenues generated by our tax dollars, fees we pay to use public services and obtain licenses, and
monies from other sources put to use by the different levels of government? A good starting point to gain
insight on this question as it relates to the federal government is Article I, Section 8, of the Constitution. Recall,
for instance, that the Constitution assigns the federal government various powers that allow it to affect the
nation as a whole. A look at the federal budget in 2019 (Figure 3.6) shows that the three largest spending
categories were Social Security (24 percent of the total budget); Medicare, Medicaid, the Children’s Health
Insurance Program, and marketplace subsidies under the Affordable Care Act (24 percent); and defense and
international security assistance (18 percent). The rest was divided among categories such as safety net
programs (11 percent), including the Earned Income Tax Credit and Child Tax Credit, unemployment
insurance, food stamps, and other low-income assistance programs; interest on federal debt (7 percent);
benefits for federal retirees and veterans (8 percent); and transportation infrastructure (3 percent).19 It is clear
from the 2019 federal budget that providing for the general welfare and national defense consumes much of
the government’s resources—not just its revenue, but also its administrative capacity and labor power.
FIGURE 3.6 Approximately two-thirds of the federal budget is spent in just three categories: Social Security, health
care and health insurance programs, and defense.
Figure 3.7 compares recent spending activities of local and state governments. Educational expenditures
constitute a major category for both. However, whereas the states spend comparatively more than local
governments on university education, local governments spend even more on elementary and secondary
education. That said, nationwide, state funding for public higher education has declined as a percentage of
university revenues; this is primarily because states have taken in lower amounts of sales taxes as internet
commerce has increased. Local governments allocate more funds to police protection, fire protection, housing
and community development, and public utilities such as water, sewage, and electricity. And while state
governments allocate comparatively more funds to public welfare programs, such as health care, income
support, and highways, both local and state governments spend roughly similar amounts on judicial and legal

3.2 • The Evolution of American Federalism 75
services and correctional services.
FIGURE 3.7 This list includes some of the largest expenditure items for state and local governments.

LEARNING OBJECTIVES
• Describe how federalism has evolved in the United States
• Compare different conceptions of federalism
The Constitution sketches a federal framework that aims to balance the forces of decentralized and centralized
governance in general terms; it does not flesh out standard operating procedures that say precisely how the
states and federal governments are to handle all policy contingencies imaginable. Therefore, officials at the
state and national levels have had some room to maneuver as they operate within the Constitution’s federal
design. This has led to changes in the configuration of federalism over time, changes corresponding to
different historical phases that capture distinct balances between state and federal authority.
THE STRUGGLE BETWEEN NATIONAL POWER AND STATE POWER

As George Washington’s secretary of the treasury from 1789 to 1795, Alexander Hamilton championed
legislative efforts to create a publicly chartered bank. For Hamilton, the establishment of the Bank of the
United States was fully within Congress’s authority, and he hoped the bank would foster economic
development, print and circulate paper money, and provide loans to the government. Although Thomas
Jefferson, Washington’s secretary of state, staunchly opposed Hamilton’s plan on the constitutional grounds
that the national government had no authority to create such an instrument, Hamilton managed to convince
the reluctant president to sign the legislation.20
When the bank’s charter expired in 1811, Jeffersonian Democratic-Republicans prevailed in blocking its
renewal. However, the fiscal hardships that plagued the government during the War of 1812, coupled with the
fragility of the country’s financial system, convinced Congress and then-president James Madison to create the
Second Bank of the United States in 1816. Many states rejected the Second Bank, arguing that the national
government was infringing upon the states’ constitutional jurisdiction.
A political showdown between Maryland and the national government emerged when James McCulloch, an
agent for the Baltimore branch of the Second Bank, refused to pay a tax that Maryland had imposed on all out-
of-state chartered banks. The standoff raised two constitutional questions: Did Congress have the authority to
charter a national bank? Were states allowed to tax federal property? In McCulloch v. Maryland, Chief Justice
John Marshall (Figure 3.8) argued that Congress could create a national bank even though the Constitution did
not expressly authorize it.21 Under the necessary and proper clause of Article I, Section 8, the Supreme Court
asserted that Congress could establish “all means which are appropriate” to fulfill “the legitimate ends” of the
Constitution. In other words, the bank was an appropriate instrument that enabled the national government to
carry out several of its enumerated powers, such as regulating interstate commerce, collecting taxes, and
borrowing money.
FIGURE 3.8 Chief Justice John Marshall, shown here in a portrait by Henry Inman, was best known for the principle
of judicial review established in Marbury v. Madison (1803), which reinforced the influence and independence of the
judiciary branch of the U.S. government.
This ruling established the doctrine of implied powers, granting Congress a vast source of discretionary power
to achieve its constitutional responsibilities. The Supreme Court also sided with the federal government on the
issue of whether states could tax federal property. Under the supremacy clause of Article VI, legitimate
national laws trump conflicting state laws. As the court observed, “the government of the Union, though
limited in its powers, is supreme within its sphere of action and its laws, when made in pursuance of the
constitution, form the supreme law of the land.” Maryland’s action violated national supremacy because “the
power to tax is the power to destroy.” This second ruling established the principle of national supremacy,
which prohibits states from meddling in the lawful activities of the national government.
Defining the scope of national power was the subject of another landmark Supreme Court decision in 1824. In
Gibbons v. Ogden, the court had to interpret the commerce clause of Article I, Section 8; specifically, it had to
determine whether the federal government had the sole authority to regulate the licensing of steamboats
operating between New York and New Jersey.22 Aaron Ogden, who had obtained an exclusive license from New
York State to operate steamboat ferries between New York City and New Jersey, sued Thomas Gibbons, who
was operating ferries along the same route under a coasting license issued by the federal government. Gibbons
lost in New York state courts and appealed. Chief Justice Marshall delivered a two-part ruling in favor of
Gibbons that strengthened the power of the national government. First, interstate commerce was interpreted
broadly to mean “commercial intercourse” among states, thus allowing Congress to regulate navigation.
Second, because the federal Licensing Act of 1793, which regulated coastal commerce, was a constitutional
exercise of Congress’s authority under the commerce clause, federal law trumped the New York State license-
monopoly law that had granted Ogden an exclusive steamboat operating license. As Marshall pointed out, “the
acts of New York must yield to the law of Congress.”23
Various states railed against the nationalization of power that had been going on since the late 1700s. When
President John Adams signed the Sedition Act in 1798, which made it a crime to speak openly against the
government, the Kentucky and Virginia legislatures passed resolutions declaring the act null on the grounds
that they retained the discretion to follow national laws. In effect, these resolutions articulated the legal
reasoning underpinning the doctrine of nullification—that states had the right to reject national laws they

deemed unconstitutional.24
A nullification crisis emerged in the 1830s over President Andrew Jackson’s tariff acts of 1828 and 1832. Led
by John Calhoun, President Jackson’s vice president, nullifiers argued that high tariffs on imported goods
benefited northern manufacturing interests while disadvantaging economies in the South. South Carolina
passed an Ordinance of Nullification declaring both tariff acts null and void and threatened to leave the Union.
The federal government responded by enacting the Force Bill in 1833, authorizing President Jackson to use
military force against states that challenged federal tariff laws. The prospect of military action coupled with the
passage of the Compromise Tariff Act of 1833 (which lowered tariffs over time) led South Carolina to back off,
ending the nullification crisis.
The ultimate showdown between national and state authority came during the Civil War. Prior to the conflict,
in Dred Scott v. Sandford, the Supreme Court ruled that the national government lacked the authority to ban
slavery in the territories.25 But the election of President Abraham Lincoln in 1860 led eleven southern states to
secede from the United States because they believed the new president would challenge the institution of
slavery. What was initially a conflict to preserve the Union became a conflict to end slavery when Lincoln
issued the Emancipation Proclamation in 1863, freeing all enslaved people in the rebellious states. The defeat
of the South had a huge impact on the balance of power between the states and the national government in two
important ways. First, the Union victory put an end to the right of states to secede and to challenge legitimate
national laws. Second, Congress imposed several conditions for readmitting former Confederate states into the
Union; among them was ratification of the Fourteenth and Fifteenth Amendments. In sum, after the Civil War
the power balance shifted toward the national government, a movement that had begun several decades before
with McCulloch v. Maryland (1819) and Gibbons v. Odgen (1824).
The period between 1819 and the 1860s demonstrated that the national government sought to establish its
role within the newly created federal design, which in turn often provoked the states to resist as they sought to
protect their interests. With the exception of the Civil War, the Supreme Court settled the power struggles
between the states and national government. From a historical perspective, the national supremacy principle
introduced during this period did not so much narrow the states’ scope of constitutional authority as restrict
their encroachment on national powers.26
DUAL FEDERALISM
The late 1870s ushered in a new phase in the evolution of U.S. federalism. Under dual federalism, the states
and national government exercise exclusive authority in distinctly delineated spheres of jurisdiction. Like the
layers of a cake, the levels of government do not blend with one another but rather are clearly defined. Two
factors contributed to the emergence of this conception of federalism. First, several Supreme Court rulings
blocked attempts by both state and federal governments to step outside their jurisdictional boundaries.
Second, the prevailing economic philosophy at the time loathed government interference in the process of
industrial development.
Industrialization changed the socioeconomic landscape of the United States. One of its adverse effects was the
concentration of market power. Because there was no national regulatory supervision to ensure fairness in
market practices, collusive behavior among powerful firms emerged in several industries.27 To curtail
widespread anticompetitive practices in the railroad industry, Congress passed the Interstate Commerce Act
in 1887, which created the Interstate Commerce Commission. Three years later, national regulatory capacity
was broadened by the Sherman Antitrust Act of 1890, which made it illegal to monopolize or attempt to
monopolize and conspire in restraining commerce (Figure 3.9). In the early stages of industrial capitalism,
federal regulations were focused for the most part on promoting market competition rather than on
addressing the social dislocations resulting from market operations, something the government began to
tackle in the 1930s.28
FIGURE 3.9 Puck, a humor magazine published from 1871 to 1918, satirized political issues of the day such as
federal attempts to regulate commerce and prevent monopolies. “‘Will you walk into my parlor?’ said the spider to
the fly” (a) by Udo Keppler depicts a spider labeled “Interstate Commerce Commission” capturing a large fly in a
web labeled “The Law” while “Plague take it! Why doesn’t it stay down when I hit it?” (b), also drawn by Keppler,
shows President William Howard Taft and his attorney general, George W. Wickersham, trying to beat a “Monopoly”
into submission with a stick labeled “Sherman Law.”
The new federal regulatory regime was dealt a legal blow early in its existence. In 1895, in United States v. E. C.
Knight, the Supreme Court ruled that the national government lacked the authority to regulate
manufacturing.29 The case came about when the government, using its regulatory power under the Sherman
Act, attempted to override American Sugar’s purchase of four sugar refineries, which would give the company
a commanding share of the industry. Distinguishing between commerce among states and the production of
goods, the court argued that the national government’s regulatory authority applied only to commercial
activities. If manufacturing activities fell within the purview of the commerce clause of the Constitution, then
“comparatively little of business operations would be left for state control,” the court argued.
In the late 1800s, some states attempted to regulate working conditions. For example, New York State passed
the Bakeshop Act in 1897, which prohibited bakery employees from working more than sixty hours in a week.
In Lochner v. New York, the Supreme Court ruled this state regulation that capped work hours
unconstitutional, on the grounds that it violated the due process clause of the Fourteenth Amendment.30 In
other words, the right to sell and buy labor is a “liberty of the individual” safeguarded by the Constitution, the
court asserted. The federal government also took up the issue of working conditions, but that case resulted in
the same outcome as in the Lochner case.31
COOPERATIVE FEDERALISM
The Great Depression of the 1930s brought economic hardships the nation had never witnessed before (Figure

3.10). Between 1929 and 1933, the national unemployment rate reached 25 percent, industrial output
dropped by half, stock market assets lost more than half their value, thousands of banks went out of business,
and the gross domestic product shrunk by one-quarter.32 Given the magnitude of the economic depression,
there was pressure on the national government to coordinate a robust national response along with the states.
FIGURE 3.10 A line outside a Chicago soup kitchen in 1931, in the midst of the Great Depression. The sign above
reads “Free Soup, Coffee, and Doughnuts for the Unemployed.”
Cooperative federalism was born of necessity and lasted well into the twentieth century as the national and
state governments each found it beneficial. Under this model, both levels of government coordinated their
actions to solve national problems, such as the Great Depression and the civil rights struggle of the following
decades. In contrast to dual federalism, it erodes the jurisdictional boundaries between the states and national
government, leading to a blending of layers as in a marble cake. The era of cooperative federalism contributed
to the gradual incursion of national authority into the jurisdictional domain of the states, as well as the
expansion of the national government’s power in concurrent policy areas.33
The New Deal programs President Franklin D. Roosevelt proposed as a means to tackle the Great Depression
ran afoul of the dual-federalism mindset of the justices on the Supreme Court in the 1930s. The court struck
down key pillars of the New Deal—the National Industrial Recovery Act and the Agricultural Adjustment Act,
for example—on the grounds that the federal government was operating in matters that were within the
purview of the states. The court’s obstructionist position infuriated Roosevelt, leading him in 1937 to propose
a court-packing plan that would add one new justice for each one over the age of seventy, thus allowing the
president to make a maximum of six new appointments. Before Congress took action on the proposal, the
Supreme Court began leaning in support of the New Deal as Chief Justice Charles Evans Hughes and Justice
Owen Roberts changed their view on federalism.34
In National Labor Relations Board (NLRB) v. Jones and Laughlin Steel,35 for instance, the Supreme Court ruled
the National Labor Relations Act of 1935 constitutional, asserting that Congress can use its authority under the
commerce clause to regulate both manufacturing activities and labor-management relations. The New Deal
changed the relationship Americans had with the national government. Before the Great Depression, the
government offered little in terms of financial aid, social benefits, and economic rights. After the New Deal, it
provided old-age pensions (Social Security), unemployment insurance, agricultural subsidies, protections for
organizing in the workplace, and a variety of other public services created during Roosevelt’s administration.
In the 1960s, President Lyndon Johnson’s administration expanded the national government’s role in society
even more. Medicaid (which provides medical assistance to the indigent), Medicare (which provides health
insurance to the elderly and some people with disabilities), and school nutrition programs were created. The
Elementary and Secondary Education Act (1965), the Higher Education Act (1965), and the Head Start
preschool program (1965) were established to expand educational opportunities and equality (Figure 3.11).
The Clean Air Act (1965), the Highway Safety Act (1966), and the Fair Packaging and Labeling Act (1966)
promoted environmental and consumer protection. Finally, laws were passed to promote urban renewal,
public housing development, and affordable housing. In addition to these Great Society programs, the Civil
Rights Act (1964) and the Voting Rights Act (1965) gave the federal government effective tools to promote civil
rights equality across the country.
FIGURE 3.11 Lady Bird Johnson, the First Lady, reads to students enrolled in Head Start (a) at the Kemper School in
Washington, DC, on March 19, 1966. President Obama visits a Head Start classroom (b) in Lawrence, Kansas, on
January 22, 2015.
While the era of cooperative federalism witnessed a broadening of federal powers in concurrent and state
policy domains, it is also the era of a deepening coordination between the states and the federal government in
Washington. Nowhere is this clearer than with respect to the social welfare and social insurance programs
created during the New Deal and Great Society eras, most of which are administered by both state and federal
authorities and are jointly funded. The Social Security Act of 1935, which created federal subsidies for state-
administered programs for the elderly; people with disabilities; dependent mothers; and children, gave state
and local officials wide discretion over eligibility and benefit levels. The unemployment insurance program,
also created by the Social Security Act, requires states to provide jobless benefits, but it allows them significant
latitude to decide the level of tax to impose on businesses in order to fund the program as well as the duration
and replacement rate of unemployment benefits. A similar multilevel division of labor governs Medicaid and
Children’s Health Insurance.36
Thus, the era of cooperative federalism left two lasting attributes on federalism in the United States. First, a
nationalization of politics emerged as a result of federal legislative activism aimed at addressing national
problems such as marketplace inefficiencies, social and political inequality, and poverty. The nationalization
process expanded the size of the federal administrative apparatus and increased the flow of federal grants to
state and local authorities, which have helped offset the financial costs of maintaining a host of New Deal- and
Great Society–era programs. The second lasting attribute is the flexibility that states and local authorities were
given in the implementation of federal social welfare programs. One consequence of administrative flexibility,
however, is that it has led to cross-state differences in the levels of benefits and coverage.37
NEW FEDERALISM
During the administrations of Presidents Richard Nixon (1969–1974) and Ronald Reagan (1981–1989),
attempts were made to reverse the process of nationalization—that is, to restore states’ prominence in policy
areas into which the federal government had moved in the past. New federalism is premised on the idea that
the decentralization of policies enhances administrative efficiency, reduces overall public spending, and
improves policy outcomes. During Nixon’s administration, general revenue sharing programs were created
that distributed funds to the state and local governments with minimal restrictions on how the money was
spent. The election of Ronald Reagan heralded the advent of a “devolution revolution” in U.S. federalism, in
which the president pledged to return authority to the states according to the Constitution. In the Omnibus
Budget Reconciliation Act of 1981, congressional leaders together with President Reagan consolidated
numerous federal grant programs related to social welfare and reformulated them in order to give state and
local administrators greater discretion in using federal funds.38

However, Reagan’s track record in promoting new federalism was inconsistent. This was partly due to the fact
that the president’s devolution agenda met some opposition from Democrats in Congress, moderate
Republicans, and interest groups, preventing him from making further advances on that front. For example,
his efforts to completely devolve Aid to Families With Dependent Children (a New Deal-era program) and food
stamps (a Great Society-era program) to the states were rejected by members of Congress, who feared states
would underfund both programs, and by members of the National Governors’ Association, who believed the
proposal would be too costly for states. Reagan terminated general revenue sharing in 1986.39
Several Supreme Court rulings also promoted new federalism by hemming in the scope of the national
government’s power, especially under the commerce clause. For example, in United States v. Lopez, the court
struck down the Gun-Free School Zones Act of 1990, which banned gun possession in school zones.40 It
argued that the regulation in question did not “substantively affect interstate commerce.” The ruling ended a
nearly sixty-year period in which the court had used a broad interpretation of the commerce clause that by the
1960s allowed it to regulate numerous local commercial activities.41
However, many would say that the years since the 9/11 attacks have swung the pendulum back in the direction
of central federal power. The creation of the Department of Homeland Security federalized disaster response
power in Washington, and the Transportation Security Administration was created to federalize airport
security. Broad new federal policies and mandates have also been carried out in the form of the Faith-Based
Initiative and No Child Left Behind (during the George W. Bush administration) and the Affordable Care Act
(during Barack Obama’s administration).
FINDING A MIDDLE GROUND
Cooperative Federalism versus New Federalism

Morton Grodzins coined the expression "marble-cake federalism" in the 1950s while conducting research on the
evolution of American federalism as a professor of political science at the University of Chicago. Until then most
scholars had thought of federalism as a layer cake, but according to Grodzins the 1930s ushered in “marble-cake
federalism” (Figure 3.12): “The American form of government is often, but erroneously, symbolized by a three-
layer cake. A far more accurate image is the rainbow or marble cake, characterized by an inseparable mingling of
differently colored ingredients, the colors appearing in vertical and diagonal strands and unexpected whirls. As
colors are mixed in the marble cake, so functions are mixed in the American federal system.”42
FIGURE 3.12 Morton Grodzins coined the expression “marble-cake federalism” in the 1950s to explain the
evolution of federalism in the United States.
Cooperative federalism has several merits:
• Because state and local governments have varying fiscal capacities, the national government’s involvement
in state activities such as education, health, and social welfare is necessary to ensure some degree of
uniformity in the provision of public services to citizens in richer and poorer states.
• The problem of collective action, which dissuades state and local authorities from raising regulatory
standards for fear they will be disadvantaged as others lower theirs, is resolved by requiring state and local
authorities to meet minimum federal standards (e.g., minimum wage and air quality).
• Federal assistance is necessary to ensure state and local programs that generate positive externalities are
maintained. For example, one state’s environmental regulations impose higher fuel prices on its residents,
but the externality of the cleaner air they produce benefits neighboring states. Without the federal
government’s support, this state and others like it would underfund such programs.
New federalism has advantages as well:
• Because of differences among states, one-size-fits-all features of federal laws are suboptimal.
Decentralization accommodates the diversity that exists across states.
• By virtue of being closer to citizens, state and local authorities are better than federal agencies at discerning
the public’s needs.
• Decentralized federalism fosters a marketplace of innovative policy ideas as states compete against each
other to minimize administrative costs and maximize policy output.
Which model of federalism do you think works best for the United States? Why?
LINK TO LEARNING
The leading international journal devoted to the practical and theoretical study of federalism is called Publius:
The Journal of Federalism (https://www.openstax.org/l/29publius) . Find out where its name comes from.

LEARNING OBJECTIVES
• Explain how federal intergovernmental grants have evolved over time
• Identify the types of federal intergovernmental grants
• Describe the characteristics of federal unfunded mandates
The national government’s ability to achieve its objectives often requires the participation of state and local
governments. Intergovernmental grants offer positive financial inducements to get states to work toward
selected national goals. A grant is commonly likened to a “carrot” to the extent that it is designed to entice the
recipient to do something. On the other hand, unfunded mandates impose federal requirements on state and
local authorities. Mandates are typically backed by the threat of penalties for non-compliance and provide little
to no compensation for the costs of implementation. Thus, given its coercive nature, a mandate is commonly
likened to a “stick.”
GRANTS
The national government has used grants to influence state actions as far back as the Articles of Confederation
when it provided states with land grants. In the first half of the 1800s, land grants were the primary means by
which the federal government supported the states. Millions of acres of federal land were donated to support
road, railroad, bridge, and canal construction projects, all of which were instrumental in piecing together a
national transportation system to facilitate migration, interstate commerce, postal mail service, and
movement of military people and equipment. Numerous universities and colleges across the country, such as
Oklahoma State University and President Biden's alma mater, the University of Delaware, are land-grant
institutions because their campuses were built on land donated by the federal government or by using funding

3.3 • Intergovernmental Relationships 83
secured by the sale of donated federal land. In the segregated South, black land grant universities were
established in 1890, including Florida A&M University and Prairie View A&M University (Texas).43 At the turn
of the twentieth century, cash grants replaced land grants as the main form of federal intergovernmental
transfers and have become a central part of modern federalism.44
LINK TO LEARNING
This video about the creation of Iowa State University (https://openstax.org/l/29stateu) shows how land grant
universities were developed to bring higher education to the people.
Federal cash grants do come with strings attached; the national government has an interest in seeing that
public monies are used for policy activities that advance national objectives. Categorical grants are federal
transfers formulated to limit recipients’ discretion in the use of funds and subject them to strict administrative
criteria that guide project selection, performance, and financial oversight, among other things. These grants
also often require some commitment of matching funds. Medicaid and the food stamp program are examples
of categorical grants. Block grants come with less stringent federal administrative conditions and provide
recipients more flexibility over how to spend grant funds. Examples of block grants include the Workforce
Investment Act program, which provides state and local agencies money to help youths and adults obtain skill
sets that will lead to better-paying jobs, and the Surface Transportation Program, which helps state and local
governments maintain and improve highways, bridges, tunnels, sidewalks, and bicycle paths. Finally,
recipients of general revenue sharing faced the least restrictions on the use of federal grants. From 1972 to
1986, when revenue sharing was abolished, upwards of $85 billion of federal money was distributed to states,
cities, counties, towns, and villages.45
During the 1960s and 1970s, funding for federal grants grew significantly, as the graphic shows in Figure 3.13.
Growth picked up again in the 1990s and 2000s. The increase since the 1990s is primarily due to the increase
in federal grant money going to Medicaid. Federally funded health-care programs jumped from $43.8 billion in
1990 to $320 billion in 2014.46 Health-related grant programs such as Medicaid and the Children’s Health
Insurance Program (CHIP) represented more than half of total federal grant expenses.
FIGURE 3.13 As the thermometer shows, federal grants to state and local governments have steadily increased
since the 1960s. The pie chart shows how federal grants are allocated among different functional categories today.
LINK TO LEARNING
The federal government uses grants and other tools to achieve its national policy priorities. Take a look at the
National Priorities Project (https://www.openstax.org/l/29natpriproj) to find out more.
The national government has greatly preferred using categorical grants to transfer funds to state and local
authorities because this type of grant gives them more control and discretion in how the money is spent. In
2014, the federal government distributed 1,099 grants, 1,078 of which were categorical, while only 21 were
block grants.47 In response to the terrorist attack on the United States on September 11, 2001, more than a
dozen new federal grant programs relating to homeland security were created, but as of 2011, only three were
block grants.
There are a couple of reasons that categorical grants are more popular than block grants despite calls to
decentralize public policy. One reason is that elected officials who sponsor these grants can take credit for
their positive outcomes (e.g., clean rivers, better-performing schools, healthier children, a secure homeland)
since elected officials, not state officials, formulate the administrative standards that lead to the results.
Another reason is that categorical grants afford federal officials greater command over grant program
performance. A common criticism leveled against block grants is that they lack mechanisms to hold state and
local administrators accountable for outcomes, a reproach the Obama administration made about the
Community Services Block Grant program. Finally, once categorical grants have been established, vested
interests in Congress and the federal bureaucracy seek to preserve them. The legislators who enact them and
the federal agencies that implement them invest heavily in defending them, ensuring their continuation.48
Reagan’s “devolution revolution” contributed to raising the number of block grants from six in 1981 to
fourteen in 1989. Block grants increased to twenty-four in 1999 during the Clinton administration and to
twenty-six during Obama’s presidency, but by 2014 the total had dropped to twenty-one, accounting for 10
percent of total federal grant outlay.49 President Trump proposed eliminating four discretionary block grants
in his "skinny" budget, although the budget was not passed.
In 1994, the Republican-controlled Congress passed legislation that called for block-granting Medicaid, which
would have capped federal Medicaid spending. President Clinton vetoed the legislation. However,
congressional efforts to convert Aid to Families with Dependent Children (AFDC) to a block grant succeeded.
The Temporary Assistance for Needy Families (TANF) block grant replaced the AFDC in 1996, marking the
first time the federal government transformed an entitlement program (which guarantees individual rights to
benefits) into a block grant. Under the AFDC, the federal government had reimbursed states a portion of the
costs they bore for running the program without placing a ceiling on the amount. In contrast, the TANF block
grant caps annual federal funding at $16.489 billion and provides a yearly lump sum to each state, which it can
use to manage its own program.
Block grants have been championed for their cost-cutting effects. By eliminating uncapped federal funding, as
the TANF issue illustrates, the national government can reverse the escalating costs of federal grant programs.
This point was not lost on Paul Ryan (R-WI), former chair of the House Budget Committee and the House Ways
and Means Committee, who, during his tenure as Speaker of the House from October 2015 to January 2019,
tried multiple times but without success to convert Medicaid into a block grant, a reform he estimated could
save the federal government upwards of $732 billion over ten years.50
Another noteworthy characteristic of block grants is that their flexibility has been undermined over time as a
result of creeping categorization, a process in which the national government places new administrative
requirements on state and local governments or supplants block grants with new categorical grants.51 Among
the more common measures used to restrict block grants’ programmatic flexibility are set-asides (i.e.,
requiring a certain share of grant funds to be designated for a specific purpose) and cost ceilings (i.e., placing a
cap on funding other purposes).

3.3 • Intergovernmental Relationships 85
UNFUNDED MANDATES
Unfunded mandates are federal laws and regulations that impose obligations on state and local governments
without fully compensating them for the administrative costs they incur. The federal government has used
mandates increasingly since the 1960s to promote national objectives in policy areas such as the
environment, civil rights, education, and homeland security. One type of mandate threatens civil and criminal
penalties for state and local authorities that fail to comply with them across the board in all programs, while
another provides for the suspension of federal grant money if the mandate is not followed. These types of
mandates are commonly referred to as crosscutting mandates. Failure to fully comply with crosscutting
mandates can result in punishments that normally include reduction of or suspension of federal grants,
prosecution of officials, fines, or some combination of these penalties. If only one requirement is not met, state
or local governments may not get any money at all.
For example, Title VI of the Civil Rights Act of 1964 authorizes the federal government to withhold federal
grants as well as file lawsuits against state and local officials for practicing racial discrimination. Finally, some
mandates come in the form of partial preemption regulations, whereby the federal government sets national
regulatory standards but delegates the enforcement to state and local governments. For example, the Clean Air
Act sets air quality regulations but instructs states to design implementation plans to achieve such standards
(Figure 3.14).52
FIGURE 3.14 The Clean Air Act is an example of an unfunded mandate. The Environmental Protection Agency sets
federal standards regarding air and water quality, but it is up to each state to implement plans to achieve these
standards.
The widespread use of federal mandates in the 1970s and 1980s provoked a backlash among state and local
authorities, which culminated in the Unfunded Mandates Reform Act (UMRA) in 1995. The UMRA’s main
objective has been to restrain the national government’s use of mandates by subjecting rules that impose
unfunded requirements on state and local governments to greater procedural scrutiny. However, since the
act’s implementation, states and local authorities have obtained limited relief. A subsequent piece of
legislation aimed to take this approach further. The 2017 Unfunded Mandates and Information Transparency
Act, HR 50, passed the House in July 2018 before being referred to the Senate, where it was placed on the
legislative calendar but moved no further.53
The number of mandates has continued to rise, and some have been especially costly to states and local
authorities. Consider the Real ID Act of 2005, a federal law designed to beef up homeland security. The law
requires driver’s licenses and state-issued identification cards (DL/IDs) to contain standardized anti-fraud
security features, specific data, and machine-readable technology. It also requires states to verify the identity
of everyone being reissued DL/IDs. The Department of Homeland Security announced a phased enforcement
of the law in 2013, which required individuals to present compliant DL/IDs to board commercial airlines
starting in 2016. The cost to states of re-issuing DL/IDs, implementing new identity verification procedures,
and redesigning DL/IDs is estimated to be $11 billion, and the federal government stands to reimburse only a
small fraction.54 Compliance with the federal law has been onerous for many states; numerous extensions to
states have been granted since 2016 and only thirty-eight were in full compliance with Real ID as of December
2018.55 Ultimately, all fifty states and the District of Columbia were certified as compliant.
The continued use of unfunded mandates clearly contradicts new federalism’s call for giving states and local
governments more flexibility in carrying out national goals. The temptation to use them appears to be difficult
for the federal government to resist, however, as the UMRA’s poor track record illustrates. This is because
mandates allow the federal government to fulfill its national priorities while passing most of the cost to the
states, an especially attractive strategy for national lawmakers trying to cut federal spending.56 Some leading
federalism scholars have used the term coercive federalism to capture this aspect of contemporary U.S.
federalism.57 In other words, Washington has been as likely to use the stick of mandates as the carrot of grants
to accomplish its national objectives. As a result, there have been more instances of confrontational
interactions between the states and the federal government.
MILESTONE
The Clery Act

The Clery Act of 1990, formally the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime
Statistics Act, requires public and private colleges and universities that participate in federal student aid
programs to disclose information about campus crime. The Act is named after Jeanne Clery, who in 1986 was
raped and murdered by a fellow student in her Lehigh University dorm room.
The U.S. Department of Education’s Clery Act Compliance Division is responsible for enforcing the 1990 Act.
Specifically, to remain eligible for federal financial aid funds and avoid penalties, colleges and universities must
comply with the following provisions:
• Publish an annual security report and make it available to current and prospective students and employees;
• Keep a public crime log that documents each crime on campus and is accessible to the public;
• Disclose information about incidents of criminal homicide, sex offenses, robbery, aggravated assault,
burglary, motor vehicle theft, arson, and hate crimes that occurred on or near campus;
• Issue warnings about Clery Act crimes that pose a threat to students and employees;
• Develop a campus community emergency response and notification strategy that is subject to annual
testing;
• Gather and report fire data to the federal government and publish an annual fire safety report;
• Devise procedures to address reports of missing students living in on-campus housing.
For more about the Clery Act, see Clery Center for Security on Campus, http://clerycenter.org.
Were you made aware of your campus’s annual security report before you enrolled? Do you think reporting about
campus security is appropriately regulated at the federal level under the Clery Act? Why or why not?

3.4 • Competitive Federalism Today 87

LEARNING OBJECTIVES
• Explain the dynamic of competitive federalism
• Analyze some issues over which the states and federal government have contended
Certain functions clearly belong to the federal government, the state governments, and local governments.
National security is a federal matter, the issuance of licenses is a state matter, and garbage collection is a local
matter. One aspect of competitive federalism today is that some policy issues, such as immigration and the
marital rights of LGBTQ people, have been redefined as the roles that states and the federal government play in
them have changed. Another aspect of competitive federalism is that interest groups seeking to change the
status quo can take a policy issue up to the federal government or down to the states if they feel it is to their
advantage. Interest groups have used this strategy to promote their views on such issues as abortion, gun
control, and the legal drinking age.
CONTENDING ISSUES
Immigration and marriage equality have not been the subject of much contention between states and the
federal government until recent decades. Before that, it was understood that the federal government handled
immigration and states determined the legality of marriage, whether between people of different races or the
same sex. This understanding of exclusive responsibilities has changed; today both levels of government play
roles in these two policy areas.
Immigration federalism describes the gradual movement of states into the immigration policy domain.58
Since the late 1990s, states have asserted a right to make immigration policy on the grounds that they are
enforcing, not supplanting, the nation’s immigration laws, and they are exercising their jurisdictional
authority by restricting undocumented immigrants’ access to education, health care, and welfare benefits,
areas that fall under the states’ responsibilities. In 2005, twenty-five states had enacted a total of thirty-nine
laws related to immigration; by 2014, forty-three states and Washington, DC, had passed a total of 288
immigration-related laws and resolutions.59 In 2020, thirty-two different states enacted a total of 206 new
measures, including many related to COVID-19.60
Arizona has been one of the states at the forefront of immigration federalism. In 2010, it passed Senate Bill
1070, which sought to make it so difficult for undocumented immigrants to live in the state that they would
return to their native country, a strategy referred to as “attrition by enforcement.”61 The federal government
filed suit to block the Arizona law, contending that it conflicted with federal immigration laws. Arizona’s law
has also divided society, because some groups have supported its tough stance on immigrants, while other
groups have opposed it for humanitarian and human-rights reasons (Figure 3.15). According to a poll of Latino
voters in the state by Arizona State University researchers, 81 percent opposed this bill.62
FIGURE 3.15 A group in St. Paul, Minnesota, protests on November 14, 2009 (a). Following the adoption of Senate
Bill 1070 in Arizona, which took a tough stance on undocumented immigration, supporters of immigration reform
demonstrated across the country in opposition to the bill, including in Lafayette Park (b), located across the street
from the White House in Washington, DC. (credit a: modification of work by “Fibonacci Blue”/Flickr; credit b:
modification of work by Nevele Otseog)
In 2012, in Arizona v. United States, the Supreme Court affirmed federal supremacy on immigration.63 The
court struck down three of the four central provisions of the Arizona law—namely, those allowing police
officers to arrest an undocumented immigrant without a warrant if they had probable cause to think the
immigrant had committed a crime that could lead to deportation, making it a crime to seek a job without
proper immigration documentation, and making it a crime to be in Arizona without valid immigration papers.
The court upheld the “show me your papers” provision, which authorizes police officers to check the
immigration status of anyone they stop or arrest who they suspect is an undocumented immigrant.64 However,
in letting this provision stand, the court warned Arizona and other states with similar laws that they could face
civil rights lawsuits if police officers applied it based on racial profiling.65 All in all, Justice Anthony Kennedy’s
opinion embraced an expansive view of the U.S. government’s authority to regulate immigration, describing it
as broad and undoubted. That authority derived from the legislative power of Congress to “establish a uniform
Rule of Naturalization,” enumerated in the Constitution. During the COVID-19 pandemic, California moved in
the opposite direction. The California Immigrant Resilience Fund led to the provision of $75 million for
undocumented Californians not eligible for other COVID-19 programs.
LINK TO LEARNING
Arizona’s Senate Bill 1070 has been the subject of heated debate. Read the views of proponents and opponents
(https://www.openstax.org/l/29azimmigbill) of the law.
LGBTQ marital rights have also significantly changed in recent years. By passing the Defense of Marriage Act
(DOMA) in 1996, the federal government stepped into this policy issue. Not only did DOMA allow states to
choose whether to recognize same-sex marriages, it also defined marriage as a union between a man and a
woman, which meant that same-sex couples were denied various federal provisions and benefits—such as the
right to file joint tax returns and receive Social Security survivor benefits. In 1997, more than half the states in
the union had passed some form of legislation banning same-sex marriage. By 2006, two years after
Massachusetts became the first state to recognize marriage equality, twenty-seven states had passed
constitutional bans on same-sex marriage. In United States v. Windsor, the Supreme Court changed the
dynamic established by DOMA by ruling that the federal government had no authority to define marriage. The
Court held that states possess the “historic and essential authority to define the marital relation,” and that the
federal government’s involvement in this area “departs from this history and tradition of reliance on state law
to define marriage.”66

3.4 • Competitive Federalism Today 89
INSIDER PERSPECTIVE
Edith Windsor: Icon of the Marriage Equality Movement

Edith Windsor, the plaintiff in the landmark Supreme Court case United States v. Windsor, became an icon of the
marriage equality movement for her successful effort to force repeal the DOMA provision that denied married
same-sex couples a host of federal provisions and protections. In 2007, after having lived together since the late
1960s, Windsor and her partner Thea Spyer were married in Canada, where same-sex marriage was legal. After
Spyer died in 2009, Windsor received a $363,053 federal tax bill on the estate Spyer had left her. Because her
marriage was not valid under federal law, her request for the estate-tax exemption that applies to surviving
spouses was denied. With the counsel of her lawyer, Roberta Kaplan, Windsor sued the federal government and
won (Figure 3.16).
FIGURE 3.16 With her client Edith Windsor looking on, attorney Roberta Kaplan speaks to the crowd at the site
of the 1969 Stonewall Riots, a historic landmark in the movement for LGBTQ rights. (credit: “Boss Tweed” /Flickr)
Because of the Windsor decision, federal laws could no longer discriminate against same-sex married couples.
What is more, marriage equality became a reality in a growing number of states as federal court after federal
court overturned state constitutional bans on same-sex marriage. The Windsor case gave federal judges the
moment of clarity from the U.S. Supreme Court that they needed. James Esseks, director of the American Civil
Liberties Union’s (ACLU) Lesbian Gay Bisexual Transgender & AIDS Project, summarizes the significance of the
case as follows: “Part of what’s gotten us to this exciting moment in American culture is not just Edie’s lawsuit
but the story of her life. The love at the core of that story, as well as the injustice at its end, is part of what has
moved America on this issue so profoundly.”67 In the final analysis, same-sex marriage is a protected
constitutional right as decided by the U.S. Supreme Court, which took up the issue again when it heard Obergefell
v. Hodges in 2015.
What role do you feel the story of Edith Windsor played in reframing the debate over same-sex marriage? How do
you think it changed the federal government’s view of its role in legislation regarding same-sex marriage relative
to the role of the states?
Following the Windsor decision, the number of states that recognized same-sex marriages increased rapidly,
as illustrated in Figure 3.17. In 2015, marriage equality was recognized in thirty-six states plus Washington,
DC, up from seventeen in 2013. The diffusion of marriage equality across states was driven in large part by
federal district and appeals courts, which have used the rationale underpinning the Windsor case (i.e., laws
cannot discriminate between same-sex and different-sex couples based on the equal protection clause of the
Fourteenth Amendment) to invalidate state bans on same-sex marriage. The 2014 court decision not to hear a
collection of cases from four different states essentially affirmed same-sex marriage in thirty states. And in
2015 the Supreme Court gave same-sex marriage a constitutional basis of right nationwide in Obergefell v.
Hodges. In sum, as the immigration and marriage equality examples illustrate, constitutional disputes have
arisen as states and the federal government have sought to reposition themselves on certain policy issues,
disputes that the federal courts have had to sort out.
FIGURE 3.17 The number of states that practiced marriage equality gradually increased between 2008 and 2015,
with the fastest increase occurring between United States v. Windsor in 2013 and Obergefell v. Hodges in 2015.
Since the Obergefell ruling, state-level bans against same-sex marriages have been rendered obsolete.
STRATEGIZING ABOUT NEW ISSUES

Mothers Against Drunk Driving (MADD) was established in 1980 by a woman whose thirteen-year-old daughter
had been killed by a drunk driver. The organization lobbied state legislators to raise the drinking age and
impose tougher penalties, but without success. States with lower drinking ages had an economic interest in
maintaining them because they lured youths from neighboring states with restricted consumption laws. So
MADD decided to redirect its lobbying efforts at Congress, hoping to find sympathetic representatives willing
to take action. In 1984, the federal government passed the National Minimum Drinking Age Act (NMDAA), a
crosscutting mandate that gradually reduced federal highway grant money to any state that failed to increase
the legal age for alcohol purchase and possession to twenty-one. After losing a legal battle against the NMDAA,
all states were in compliance by 1988.68
By creating two institutional access points—the federal and state governments—the U.S. federal system enables
interest groups such as MADD to strategize about how best to achieve their policy objectives. The term venue
shopping refers to a strategy in which interest groups select the level and branch of government (legislature,
judiciary, or executive) they calculate will be most advantageous for them.69 If one institutional venue proves
unreceptive to an advocacy group’s policy goal, as state legislators were to MADD, the group will attempt to
steer its issue to a more responsive venue.
The strategy anti-abortion advocates have used in recent years is another example of venue shopping. In their
attempts to limit abortion rights in the wake of the 1973 Roe v. Wade Supreme Court decision making abortion
legal nationwide, anti-abortion advocates initially targeted Congress in hopes of obtaining restrictive
legislation.70 Lack of progress at the national level prompted them to shift their focus to state legislators, where
their advocacy efforts have been more successful. By 2015, for example, thirty-eight states required some form
of parental involvement in a minor’s decision to have an abortion, forty-six states allowed individual health-
care providers to refuse to participate in abortions, and thirty-two states prohibited the use of public funds to

3.5 • Advantages and Disadvantages of Federalism 91
carry out an abortion except when the woman’s life is in danger or the pregnancy is the result of rape or incest.
While 31 percent of U.S. women of childbearing age resided in one of the thirteen states that had passed
restrictive abortion laws in 2000, by 2013, about 56 percent of such women resided in one of the twenty-seven
states where abortion is restricted.71

LEARNING OBJECTIVES
• Discuss the advantages of federalism
• Explain the disadvantages of federalism
The federal design of our Constitution has had a profound effect on U.S. politics. Several positive and negative
attributes of federalism have manifested themselves in the U.S. political system.
THE BENEFITS OF FEDERALISM

Among the merits of federalism are that it promotes policy innovation and political participation and
accommodates diversity of opinion. On the subject of policy innovation, Supreme Court Justice Louis Brandeis
observed in 1932 that “a single courageous state may, if its citizens choose, serve as a laboratory; and try novel
social and economic experiments without risk to the rest of the country.”72 What Brandeis meant was that
states could harness their constitutional authority to engage in policy innovations that might eventually be
diffused to other states and at the national level. For example, a number of New Deal breakthroughs, such as
child labor laws, were inspired by state policies. Prior to the passage of the Nineteenth Amendment, women
already had the right to vote in several states. California has led the way in establishing standards for fuel
emissions and other environmental policies (Figure 3.18). Recently, the health insurance exchanges run by
Connecticut, Kentucky, Rhode Island, and Washington have served as models for other states seeking to
improve the performance of their exchanges.73
FIGURE 3.18 The California Air Resources Board was established in 1967, before passage of the federal Clean Air
Act. The federal Environmental Protection Agency has adopted California emissions standards nationally, starting
with the 2016 model year, and is working with California regulators to establish stricter national emissions
standards going forward. The Trump Administration revoked California's authority to set higher standards than their
lower federal standards; however California challenged this ruling in court. The Biden Administration is expected to
reverse the Trump ruling and, in anticipation of this change, fifteen states and the District of Columbia have upped
their standards.74 (credit a: modification of work by Antti T. Nissinen; credit b: modification of work by Marcin
Wichary)
Another advantage of federalism is that because our federal system creates two levels of government with the
capacity to take action, failure to attain a desired policy goal at one level can be offset by successfully securing
the support of elected representatives at another level. Thus, individuals, groups, and social movements are
encouraged to actively participate and help shape public policy.
GET CONNECTED!
Federalism and Political Office
Thinking of running for elected office? Well, you have several options. As Table 3.1 shows, there are a total of
510,682 elected offices at the federal, state, and local levels. Elected representatives in municipal and township
governments account for a little more than half the total number of elected officials in the United States. Political
careers rarely start at the national level. In fact, a very small share of politicians at the subnational level transition to
the national stage as representatives, senators, vice presidents, or presidents.
Elected Officials at the Federal, State, and Local Levels
Number of Elective Bodies Number of Elected Officials
Federal Government 1
Executive branch 2
U.S. Senate 100
U.S. House of Representatives 435
State Government 50
State legislatures 7,382
Statewide offices 1,036
State boards 1,331
Local Government
County governments 3,034 58,818
Municipal governments 19,429 135,531
Town governments 16,504 126,958
School districts 13,506 95,000
Special districts 35,052 84,089
Total 87,576 510,682
TABLE 3.1 This table lists the number of elected bodies and elected officials at the federal,
state, and local levels.75
If you are interested in serving the public as an elected official, there are more opportunities to do so at the local

3.5 • Advantages and Disadvantages of Federalism 93
and state levels than at the national level. As an added incentive for setting your sights at the subnational stage,
consider the following. Whereas only 35 percent of U.S. adults trusted Congress in 2018, according to Gallup, about
63 percent trusted their state governments and 72 percent had confidence in their local governments.76 77
If you ran for public office, what problems would you most want to solve? What level of government would best
enable you to solve them, and why?
The system of checks and balances in our political system often prevents the federal government from
imposing uniform policies across the country. As a result, states and local communities have the latitude to
address policy issues based on the specific needs and interests of their citizens. The diversity of public
viewpoints across states is manifested by differences in the way states handle access to abortion, distribution
of alcohol, gun control, and social welfare benefits, for example.
THE DRAWBACKS OF FEDERALISM

Federalism also comes with drawbacks. Chief among them are economic disparities across states, race-to-
the-bottom dynamics (i.e., states compete to attract business by lowering taxes and regulations), and the
difficulty of taking action on issues of national importance.
Stark economic differences across states have a profound effect on the well-being of citizens. For example, in
2017, Maryland had the highest median household income ($80,776), while West Virginia had the lowest
($43,469).78 There are also huge disparities in school funding across states. In 2016, New York spent $22,366
per student for elementary and secondary education, while Utah spent $6,953.79 Furthermore, health-care
access, costs, and quality vary greatly across states.80 Proponents of social justice contend that federalism has
tended to obstruct national efforts to effectively even out these disparities. When national policy-making is
stymied, and policy advocates move to the state level, it takes fifty-one different advocacy efforts to bring about
change, compared to one effort were the national government to take the lead.
LINK TO LEARNING
The National Education Association discusses the problem of inequality in the educational system of the
United States. Visit the Racial & Social Justice page of the NEA website (https://www.openstax.org/l/
29equalityedu) to see how NEA EdJustice is advocating for change in this area.
The economic strategy of using race-to-the-bottom tactics in order to compete with other states in attracting
new business growth also carries a social cost. For example, workers’ safety and pay can suffer as workplace
regulations are lifted, and the reduction in payroll taxes for employers has led a number of states to end up
with underfunded unemployment insurance programs.81 As of March 2021, twelve states have also opted not
to expand Medicaid, as encouraged by the Patient Protection and Affordable Care Act in 2010, for fear it will
raise state public spending and increase employers’ cost of employee benefits, despite provisions that the
federal government will pick up nearly all cost of the expansion.82 83 More than half of these states are in the
South.
The federal design of our Constitution and the system of checks and balances has jeopardized or outright
blocked federal responses to important national issues. President Roosevelt’s efforts to combat the scourge of
the Great Depression were initially struck down by the Supreme Court. More recently, President Obama’s effort
to make health insurance accessible to more Americans under the Affordable Care Act immediately ran into
legal challenges84 from some states, but it has been supported by the Supreme Court so far. However, the
federal government’s ability to defend the voting rights of citizens suffered a major setback when the Supreme
Court in 2013 struck down a key provision of the Voting Rights Act of 1965.85 No longer are the nine states with
histories of racial discrimination in their voting processes required to submit plans for changes to the federal
government for approval. After a tumultuous 2020 election, many states in 2021 advanced legislation to make
voting rules and processes more rigorous, a move many said was an effort to limit voting access. For example,
elected leaders in Georgia passed a law making voter ID requirements much stricter and also significantly
limited options to vote outside of Election Day itself.86

3 • Key Terms 95
Key Terms
bill of attainder a legislative action declaring someone guilty without a trial; prohibited under the
Constitution
block grant a type of grant that comes with less stringent federal administrative conditions and provide
recipients more latitude over how to spend grant funds
categorical grant a federal transfer formulated to limit recipients’ discretion in the use of funds and subject
them to strict administrative criteria
concurrent powers shared state and federal powers that range from taxing, borrowing, and making and
enforcing laws to establishing court systems
cooperative federalism a style of federalism in which both levels of government coordinate their actions to
solve national problems, leading to the blending of layers as in a marble cake
creeping categorization a process in which the national government attaches new administrative
requirements to block grants or supplants them with new categorical grants
devolution a process in which powers from the central government in a unitary system are delegated to
subnational units
dual federalism a style of federalism in which the states and national government exercise exclusive
authority in distinctly delineated spheres of jurisdiction, creating a layer-cake view of federalism
elastic clause the last clause of Article I, Section 8, which enables the national government “to make all
Laws which shall be necessary and proper for carrying” out all its constitutional responsibilities
ex post facto law a law that criminalizes an act retroactively; prohibited under the Constitution
federalism an institutional arrangement that creates two relatively autonomous levels of government, each
possessing the capacity to act directly on the people with authority granted by the national constitution
full faith and credit clause found in Article IV, Section 1, of the Constitution, this clause requires states to
accept court decisions, public acts, and contracts of other states; also referred to as the comity provision
general revenue sharing a type of federal grant that places minimal restrictions on how state and local
governments spend the money
immigration federalism the gradual movement of states into the immigration policy domain traditionally
handled by the federal government
new federalism a style of federalism premised on the idea that the decentralization of policies enhances
administrative efficiency, reduces overall public spending, and improves outcomes
nullification a doctrine promoted by John Calhoun of South Carolina in the 1830s, asserting that if a state
deems a federal law unconstitutional, it can nullify it within its borders
privileges and immunities clause found in Article IV, Section 2, of the Constitution, this clause prohibits
states from discriminating against out-of-staters by denying such guarantees as access to courts, legal
protection, and property and travel rights
race-to-the-bottom a dynamic in which states compete to attract business by lowering taxes and
regulations, often to workers’ detriment
unfunded mandates federal laws and regulations that impose obligations on state and local governments
without fully compensating them for the costs of implementation
unitary system a centralized system of government in which the subnational government is dependent on
the central government, where substantial authority is concentrated
venue shopping a strategy in which interest groups select the level and branch of government they
calculate will be most receptive to their policy goals
writ of habeas corpus a petition that enables someone in custody to petition a judge to determine whether
that person’s detention is legal
96 3 • Summary
Summary
Federalism is a system of government that creates two relatively autonomous levels of government, each
possessing authority granted to them by the national constitution. Federal systems like the one in the United
States are different from unitary systems, which concentrate authority in the national government, and from
confederations, which concentrate authority in subnational governments.
The U.S. Constitution allocates powers to the states and federal government, structures the relationship
between these two levels of government, and guides state-to-state relationships. Federal, state, and local
governments rely on different sources of revenue to enable them to fulfill their public responsibilities.

Federalism in the United States has gone through several phases of evolution during which the relationship
between the federal and state governments has varied. In the era of dual federalism, both levels of government
stayed within their own jurisdictional spheres. During the era of cooperative federalism, the federal
government became active in policy areas previously handled by the states. The 1970s ushered in an era of
new federalism and attempts to decentralize policy management.

To accomplish its policy priorities, the federal government often needs to elicit the cooperation of states and
local governments, using various strategies. Block and categorical grants provide money to lower government
levels to subsidize the cost of implementing policy programs fashioned in part by the federal government. This
strategy gives state and local authorities some degree of flexibility and discretion as they coordinate with the
federal government. On the other hand, mandate compels state and local governments to abide by federal laws
and regulations or face penalties.

Some policy areas have been redefined as a result of changes in the roles that states and the federal
government play in them. The constitutional disputes these changes often trigger have had to be sorted out by
the Supreme Court. Contemporary federalism has also witnessed interest groups engaging in venue shopping.
Aware of the multiple access points to our political system, such groups seek to access the level of government
they deem will be most receptive to their policy views.

The benefits of federalism are that it can encourage political participation, give states an incentive to engage in
policy innovation, and accommodate diverse viewpoints across the country. The disadvantages are that it can
set off a race to the bottom among states, cause cross-state economic and social disparities, and obstruct
federal efforts to address national problems.
Review Questions
1. Which statement about federal and unitary systems is most accurate?
a. In a federal system, power is concentrated in the states; in a unitary system, it is concentrated in the
national government.
b. In a federal system, the constitution allocates powers between states and federal government; in a
unitary system, powers are lodged in the national government.
c. Today there are more countries with federal systems than with unitary systems.
d. The United States and Japan have federal systems, while Great Britain and Canada have unitary
systems.

3 • Review Questions 97
2. Which statement is most accurate about the sources of revenue for local and state governments?
a. Taxes generate well over one-half the total revenue of local and state governments.
b. Property taxes generate the most tax revenue for both local and state governments.
c. Between 30 and 40 percent of the revenue for local and state governments comes from grant money.
d. Local and state governments generate an equal amount of revenue from issuing licenses and
certificates.
3. What key constitutional provisions define the scope of authority of the federal and state governments?
4. What are the main functions of federal and state governments?
5. In McCulloch v. Maryland, the Supreme Court invoked which provisions of the constitution?
a. Tenth Amendment and spending clause
b. commerce clause and supremacy clause
c. necessary and proper clause and supremacy clause
d. taxing power and necessary and proper clause
6. Which statement about new federalism is not true?

a. New federalism was launched by President Nixon and continued by President Reagan.
b. New federalism is based on the idea that decentralization of responsibility enhances administrative
efficiency.
c. United States v. Lopez is a Supreme Court ruling that advanced the logic of new federalism.
d. President Reagan was able to promote new federalism consistently throughout his administration.
7. Which is not a merit of cooperative federalism?

a. Federal cooperation helps mitigate the problem of collective action among states.
b. Federal assistance encourages state and local governments to generate positive externalities.
c. Cooperative federalism respects the traditional jurisdictional boundaries between states and federal
government.
d. Federal assistance ensures some degree of uniformity of public services across states.
8. What are the main differences between cooperative federalism and dual federalism?
9. What were the implications of McCulloch v. Maryland for federalism?
10. Which statement about federal grants in recent decades is most accurate?
a. The federal government allocates the most grant money to income security.
b. The amount of federal grant money going to states has steadily increased since the 1960s.
c. The majority of federal grants are block grants.
d. Block grants tend to gain more flexibility over time.
11. Which statement about unfunded mandates is false?

a. The Unfunded Mandates Reform Act has prevented Congress from using unfunded mandates.
b. The Clean Air Act is a type of federal partial preemptive regulation.
c. Title VI of the Civil Rights Act establishes crosscutting requirements.
d. New federalism promotes the use of unfunded mandates.
12. What does it mean to refer to the carrot of grants and the stick of mandates?
98 3 • Critical Thinking Questions
13. Which statement about immigration federalism is false?

a. The Arizona v. United States decision struck down all Arizona’s most restrictive provisions on
undocumented immigration.
b. Since the 1990s, states have increasingly moved into the policy domain of immigration.
c. Federal immigration laws trump state laws.
d. States’ involvement in immigration is partly due to their interest in preventing undocumented
immigrants from accessing public services such as education and welfare benefits.
14. Which statement about the evolution of same-sex marriage is false?

a. The federal government became involved in this issue when it passed DOMA.
b. In the 1990s and 2000s, the number of state restrictions on same-sex marriage increased.
c. United States v. Windsor legalized same-sex marriage in the United States.
d. More than half the states had legalized same-sex marriage by the time the Supreme Court made
same-sex marriage legal nationwide in 2015.
15. Which statement about venue shopping is true?

a. MADD steered the drinking age issue from the federal government down to the states.
b. Anti-abortion advocates have steered the abortion issue from the states up to the federal government.
c. Both MADD and anti-abortion proponents redirected their advocacy from the states to the federal
government.
d. None of the statements are correct.
16. What does venue shopping mean?
17. Which of the following is not a benefit of federalism?

a. Federalism promotes political participation.
b. Federalism encourages economic equality across the country.
c. Federalism provides for multiple levels of government action.
d. Federalism accommodates a diversity of opinion.
18. Describe the advantages of federalism.
19. Describe the disadvantages of federalism.
Critical Thinking Questions

20. Describe the primary differences in the role of citizens in government among the federal, confederation,
and unitary systems.
21. How have the political and economic relationships between the states and federal government evolved
since the early 1800s?
22. Discuss how the federal government shapes the actions of state and local governments.
23. What are the merits and drawbacks of American federalism?
24. What do you see as the upcoming challenges to federalism in the next decade? Choose an issue and
outline how the states and the federal government could respond.
Suggestions for Further Study

Beer, Samuel H. 1998. To Make a Nation: The Rediscovery of American Federalism. Cambridge, MA: Harvard
University Press.
Berry, Christopher R. 2009. Imperfect Union: Representation and Taxation in Multilevel Governments. New
York: Cambridge University Press.

3 • Suggestions for Further Study 99
Derthick, Martha, ed. 1999. Dilemmas of Scale in America’s Federal Democracy. New York: Cambridge
University Press.
Diamond, Martin. 1981. The Founding of the American Democratic Republic. Belmont, CA: Wadsworth
Cengage Learning.
Elazar, Daniel J. 1992. Federal Systems of the World: A Handbook of Federal, Confederal and Autonomy
Arrangements. Harlow, Essex: Longman Current Affairs.
Grodzins, Morton. 2004. “The Federal System.” In American Government Readings and Cases, ed. P. Woll. New
York: Pearson Longman, 74–78.
LaCroix, Alison. 2011. The Ideological Origins of American Federalism. Cambridge, MA: Harvard University
Press.
Orren, Karen, and Stephen Skowronek. 2004. The Search for American Political Development. New York:
Cambridge University Press.
O’Toole, Laurence J., Jr., and Robert K. Christensen, eds. 2012. American Intergovernmental Relations:
Foundations, Perspectives, and Issues. Thousand Oaks, CA: CQ Press.
Peterson, Paul E. 1995. The Price of Federalism. Washington, DC: Brookings Institution Press.
Watts, Ronald L. 1999. Comparing Federal Systems. 2nd ed. Kingston, Ontario: McGill-Queen’s University
Press.

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American Federalism 3

3.1 The Division of Powers

FEDERALISM DEFINED AND CONTRASTED

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FEDERALISM AND THE CONSTITUTION

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THE DISTRIBUTION OF FINANCES

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services and correctional services.

3.2 The Evolution of American Federalism

THE STRUGGLE BETWEEN NATIONAL POWER AND STATE POWER

government was infringing upon the states’ constitutional jurisdiction.

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FINDING A MIDDLE GROUND

Cooperative Federalism versus New Federalism

Cooperative federalism has several merits:

New federalism has advantages as well:

3.3 Intergovernmental Relationships

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The Clery Act

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3.4 Competitive Federalism Today

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Edith Windsor: Icon of the Marriage Equality Movement

STRATEGIZING ABOUT NEW ISSUES

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3.5 Advantages and Disadvantages of Federalism

THE BENEFITS OF FEDERALISM

encouraged to actively participate and help shape public policy.

Elected Officials at the Federal, State, and Local Levels

Number of Elective Bodies Number of Elected Officials

U.S. Senate 100

U.S. House of Representatives 435

State legislatures 7,382

Statewide offices 1,036

State boards 1,331

County governments 3,034 58,818

Municipal governments 19,429 135,531

Town governments 16,504 126,958

School districts 13,506 95,000

Special districts 35,052 84,089

Total 87,576 510,682

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THE DRAWBACKS OF FEDERALISM

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3.2 The Evolution of American Federalism

3.3 Intergovernmental Relationships

3.4 Competitive Federalism Today

3.5 Advantages and Disadvantages of Federalism

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4. What are the main functions of federal and state governments?

6. Which statement about new federalism is not true?

7. Which is not a merit of cooperative federalism?

9. What were the implications of McCulloch v. Maryland for federalism?

11. Which statement about unfunded mandates is false?