Why It Matters, How It Could Happen
Federalism, the principle that some policy matters fall under the authority of the states and others under the authority of the national government, has long tended to be much admired but little observed. Although it often seems futile to protest the usurpation of state responsibilities by Washington, this book explains why a restoration of federalism is both desirable and achievable.
In recent years, we have witnessed a renewed interest in federalism. Congress has transferred authority over some policy areas to the states, welfare reform being the most prominent example. Supreme Court decisions since 1995 have reestablished federalist doctrines. Legal scholars and political scientists have argued for a more open, federalist politics. Those developments have occurred against the backdrop of growing discontent with the federal governments rigidities, inefficiencies, and empty promises.
A federalist revival may prove a mirage. Similar, earlier stirrings in modern American politicsfor instance, under the Nixon and Reagan administrationsturned out to be mere ripples on a tidal wave of progressive nationalization. As Tocqueville observed, democratic government naturally tends toward centralization. Powerful interest groups have a huge stake in nationalized institutions and policy regimes and prove hard to dislodge.
One can, however, identify political forces and institutional dynamics with the potential to counteract the seemingly ineluctable tendencies toward political centralization. A scenario of centralization is sufficiently plausible, and the prize of reestablishing meaningful constraints on a meddlesome government sufficiently large, to merit serious consideration.
Why Real Federalism Matters
Federalism is often misunderstood as a mere device of bureaucratic organization or as a protection of states rights. Real federalism, in contrast, is a structural constraint on government. It disciplines government and forces the states to compete for the citizens business, talents, and assets. Real federalism permits citizens to vote with their feet and to choose among competing jurisdictions, each of which offers a different mix of government services. That sort of federalism attempts to replicate in politics the advantages of choice and competition that characterize private, economic markets: innovation, better products at lower prices, and a tailoring of different product mixes to citizen-consumers with widely varying preferences.
The benefits of jurisdictional competition are visible at all levels of government. Home buyers compare local tax rates, schools, and police protection and thereby induce governments to offer varying baskets of government services. At the international level, the free flow of capital (and to some extent labor) has rewarded Americas dynamic economy, while punishing countries with inflationary or collectivist economic policies. More robust state competition would produce similar disciplining, service-enhancing benefits.
Federalism has been derided as an anachronism in an increasingly complex society where citizens feel little attachment to their state governments. The premises of that argument are true, but they point to the importance, not the irrelevance, of federalism. Increased economic complexity makes it more important to carve a vast commons into smaller, more manageable, competing commons. The enhanced mobility of citizens and their diminished attachment to their place of birth or residence strengthen the disciplining force of jurisdictional competition. Real federalism is uniquely suited to a country of highly mobile and sophisticated citizens.
What It Would Take
Real federalism requires effective constitutional constraints on the national government. Without them, the national government will routinely succumb to interest-group entreaties to wipe out jurisdictional competition. American government lost such constraints some six decades ago, when the constitutional notion of limited and enumerated federal powers collapsed in the wake of the New Deal.
The reestablishment of constitutional constraints requires a Supreme Court with the will and the nerve to assert principled, constitutional limits to national power. No other institution, least of all Congress, can be relied on to obey and enforce those limits. But the Supreme Court cannot enforce the constraints on federal power enumerated in the Constitution on its own. Principled federalism implies the repeal of many federal statutes enacted over the past six decades. That is out of the question, however. In 1937, when President Roosevelt threatened to pack the Supreme Court with appointees who could be relied on to sustain expansive federal statutes, the Court learned that it could not unilaterally safeguard constitutional norms against dominant political majorities. Federalism, in short, needs a constituency.
The most plausible constituency for federalism (and the only currently available one) is what political analyst and activist Grover Norquist has called the "Leave-Us-Alone" coalition. The members of that coalitionincluding, for example, religious groups, property-rights groups, the term-limits movement, home-school and school-choice organizations, gun owners, and tax-limitation advocateshave a strategic interest in more open, decentralized political arrangements. Were the Supreme Court to endorse, embolden, and legitimize those constituencies, they would in turn defend the Supreme Court and its federalist jurisprudence against political assaults. Over time, a virtuous cycle of progressive accommodation and (often implicit) cooperation between the Court and federalist forces might succeed in advancing federalism.
The difficulty with envisioning that success lies in the particulars, not in the general analysis. Alexander Bickel and Martin Shapiro, among other scholars, have shown that the Supreme Court has at times advanced constituencies that, while marginal at the time, embodied ideas whose time had come. Notably, in the 1950s and 1960s, the Court endorsed and legitimized constituencies for civil rights, for a radical separation between church and state, and for feminism. The constituencies, in turn, leveraged that credibility in political arenas and defended the Court when its political positions, from school busing to the rights of criminals, became wildly unpopular.
A federalist scenario along similar linesjudicial encouragement of federalist constituencies and the constituencies endorsement of the Supreme Court as an institutional allyis not so implausible as it may seem at first. In some areas, the scenario is already being realized.
The Supreme Courts Federalism
The Supreme Court has, since 1995, reasserted federalist doctrines. In United States v. Lopez (1995), the Court invalidated a federal statute criminalizing the possession of handguns in and around schools as beyond congressional authority under the commerce clause of the Constitution. City of Boerne v. Flores (1997) struck down the federal Religious Freedom Restoration Act, which compelled state and local governments to exempt religious institutions from many general laws (such as zoning regulations). Printz v. United States (1997) declared unconstitutional an interim federal provision commanding states and localities to conduct background checks on would-be gun purchasers. Seminole Tribe v. Florida (1997) substantially expanded the immunity of state officials from lawsuits under federal statutes. Federalist values have also informed Supreme Court decisions on voting rights and assisted suicide. In statutory cases, the Court has adopted extremely narrow interpretations of legislation that threatens to extend the federal governments reach into state and local affairs.
Although prominent scholars and journalists have denounced those decisions as an impending return to "antebellum" or even "preconstitutional" values, the Supreme Courts federalism has, in fact, remained quite limited. First, the Supreme Courts federalism has a distinctly statist bent. Its point is not citizen choice and state competition but state sovereignty. The Court has tended to assert federalism in areas where the states can safely be relied on to regulate (such as crime), while allowing Congress free reign in areas where state competition might discipline government (such as economic and environmental regulation). Second, the Supreme Court has curbed only the means of national legislation, not the ends. Congress can address anything, so long as it refrains from pursuing its objectives by "commandeering" state resources or by enlisting the federal courts in implementing federal schemes. In particular, Congress remains free to spend its way around constitutional limitations by conditioning federal funds on the states compliance with its mandates. Third, the Supreme Court has advanced federalism by limiting the authority of the federal courts rather than Congress.
Over all the cases and doctrines hovers the ghost of 1937. Fearful of reigniting a battle it lost six decades ago, the Supreme Court has shied away from an unequivocal reassertion of enumerated powers. Instead, it has advanced federalism when and so long as it can avoid a direct confrontation with Congress. Moreover, even such limited reconstruction of federalism depends on a narrow, 5-4 majority on the Supreme Court.
Still, the existing federalist doctrines contain the seeds of their own expansion. The Courts reluctance to confront Congress suggests that the Court should reimpose limits to national power when it has a realistic chance of getting away with it. Quite clearly, the Supreme Court has reintroduced federalism as a constitutional concern. The central question is whether political constituencies will take advantage of that opening for a federalist revival, and, if so, whether the Court can bring itself to cooperate with those constituencies.
The Leave-Us-Aloners and the Supreme Court
Federalism as an abstract proposition has never had a constituency. Political constituencies favor (or oppose) federalism to advance their substantive interests and agendaand most of them agitate for centralization most of the time. Interest groups and parties thrive on redistribution, which is best accomplished at a highly centralized level of governmentbecause it spreads the costs over a larger number of losers and eliminates exit options for them. Moreover, contrary to popular lore and the presumptions of New Deal jurisprudence, the states do not favor real federalism; they oppose it. While the states will defend their narrow prerogatives (such as immunity from suit under federal statutes), experience shows that they cannot be expected to support federalist competition.
In contrast, the Leave-Us-Alone constituencies identified earlier are a genuinely federalist force. Deeply suspicious of Washington politics, all Leave-Us-Alone constituencies fight against national impositions, from gun control to federal land-use regulations in environmental disguise. Most have maintained highly decentralized organizations. None pursue the redistributionist objectives that draw ordinary economic interests into the Beltway.
The difficulty in envisioning a virtuous cycle of (implicit) cooperation between the Leave-Us-Aloners and the Supreme Court is the pronounced mutual distrust between the Justices and federal-isms constituencies. By design the most nationalist and most elitist of all our institutions, the Supreme Court is naturally suspicious of an open, indeterminate politics that would leave too much beyond the reach of the Constitution. On issues that are central to the Leave-Us-Alonersterm limits, abortion, homosexual rights, the role of religion in public lifethe Court has often displayed an exasperating tendency to cater to elite opinion and, correspondingly, to treat populist constituencies as gauche and irresponsible. Conversely (and consequently), Leave-Us-Aloners tend to view the Supreme Court as the institutional bulwark of a despised elite culture.
That mutual distrust need not be permanent, however. The Supreme Courts decisions on civil rightsa central, hotly contested issueprovide a clear-cut example of a rapprochement. For a full decade, the Court has methodically curtailed racial preferences. It has also effectively sanctioned a state-by-state campaign for the abolition of such preferences. As a result, advocates of official colorblindness have come to view the Supreme Court as a reliable allyin fact, as the only public institution that will support and lend legitimacy to their endeavor. Civil rights law illustrates that the relation between the Supreme Court and Leave-Us-Alone constituencies can change, in the span of a decade, from intense hostility to mutual (if guarded) trust and reliance.
A similar dynamic may be unfolding in the area of religion, where the Supreme Court has moved from the selective disenfranchisement of religion to official neutrality as the constitutional baseline. In a departure from past precedent, the Court has held repeatedly that religious groups and institutions may participate in public subsidy and financial aid programs. That posture may suffice to win the Leave-Us-Alone battles that matterforemost among them, the battle over the participation of religious schools in school choice and voucher schemes. Here, too, the signs point toward progressive mutual accommodation.
Both the Supreme Court and the constituencies for a more decentralized politics have considerable room to maneuver toward federalist doctrines and arrangements. As suggested, the Courts federalist rulings since 1995 can serve as stepping stones toward further advances that may eventually reconverge on the doctrine of enumerated powers. The Court will be presented with opportunities to reassert that doctrine without, at the same time, triggering a fierce political backlash. One set of such opportunities is presented by the ever-rising tide of federal criminal statutes that are largely symbolic, because they are both unneeded and rarely enforced. The Supreme Court can also reassert enumerated powers when federalism is a strong second choice for the losing constituencies, especially Leave-Us-Aloners. Potent religious constituencies "lost" when the Supreme Court struck down the Religious Freedom Restoration Act on federalist grounds. No backlash materialized, however, precisely because many of those same constituencies favor and, in the long run, benefit from constitutional limits on the national government.
Even Congress, predisposed though it is to extend its authority, may be prevailed upon to pursue federalist objectives.
One plausible strategy is to enable legislators who cannot restrain themselves to vote for federalist restraints on the courts. The 1996 Prison Litigation Reform Act effectively terminated federal court supervision of state and local prison systems. In a similar fashion, Congress could curtail judicial oversight over some 500 school districts. Another plausible strategy is to curtail federal statutory entitlements that empower advocacy organizations (such as welfare rights, environmental, and civil rights groups) to enforce federal mandates in court. The 1996 welfare reform explicitly abolished private AFDC entitlements. As a result of that underrated change in the law, advocacy groups have been unable to stop welfare reform in the states. A Republican Congress has a big incentive to replicate that successful federalist experiment: statutory entitlements overwhelmingly benefit liberal, Democratic constituencies and bureaucracies. Entitlement repeals crack the distributional coalitions that grow around entitlementswhile advancing federalism. All such reforms would be welcomed by the Supreme Court; all of them would tend to give Leave-Us-Alone constituencies confidence that there is hope yet for a more open, decentralized politics.
A Federalist Revival
Tocqueville was realistic about democracies inherent tendencies toward centralization. But he was not despondent: political "art," he hoped, could still preserve individual and local liberties. Our thoroughly nationalized political process, which promises all things for everyone, has produced widespread cynicism and disaffection. Organized Leave-Us-Aloners merely articulate that discontent; their push for a more decentralized, realistic, federalist politics can build on a large reservoir of latent support. The art lies in channeling those broader sentiments into the institutional pathways that will at length produce constitutional constraints. The realization of such a scenario is by no means a foregone conclusion. But the prospect of a federalist revival has come from being unthinkable to being plausible. That alone is grounds for hope.