Friday, September 6, 2013

The Evolution: Dual Federalism to Fiscal Federalism

The limits of Constitutional power and the power of the different spheres of government (national/state) continued to evolve during the early 19th Century. After all, the United States was (and still is to some extent) an experiment in federal democratic republicanism.

Secession & Civil War
  at question: Does a state have the autonomy to decide to withdraw from the Union?
  conclusion/result: No (might makes right); 14th Amendment

Dual Federalism essentially ends with FDR and the New Deal. America then enters a period characterized by what is known as Cooperative Federalism. (state and national government work together on a common problem; i.e.- unemployment)

Cooperative Federalism evolves into what is called (for our purposes) Picket-Fence Federalism by the 1960s. Different levels of government tackle the same problem in their own way while trying to support the efforts of the other levels.


The most influence that the national government has over state governments today comes by the way of what we call fiscal federalism.

Fiscal federalism - taxing, spending, and providing aid within the federal structure

The national government can have an immense amount of influence over what the states do by offering grants-in-aid to the states. (We can just refer to them as grants) This is money that is given to the state by the national government to aid the state governments in doing something.

Grants come in 2 forms: categorical grants or block grants

Categorical grants - money is designated and can only be used for a specific purpose (category)
  Example: Money is provided to the state to assist specifically with bridge repairs/renovations

Block grants - money that is provided for use in a general area
  Example: money is provided to the state to assist with general transportation needs

So the national government just gives away money to state governments? Is the national government the most benevolent institution or what? Well.......no.
As with many gifts, there are strings attached. The strings, we call mandates.

Mandates - conditions of aid
  Things the state has to do in order to receive the grant money
  Examples: Education money & 'No Child Left Behind'; National Drinking Age

Some mandates exist, not so that a state can get aid, but so that the state can continue to receive the aid it already received regularly. These are referred to as unfunded mandates. (comply or else)

Again, it all comes down to money. What is money? (Power) How much of it do you want? (All of it or as much as you can get) So are you willing to comply with some rules and stipulations in order to get it?
Welcome to the world of grants & mandates. Fiscal federalism at its finest.

As you can see, under the current structure of American Federalism, economic conditions/incentives make things happen. This is also true of how the government exercises its influence over the people. The government, through the use and interpretation of the commerce clause, has seen an expansion of power ever since Gibbons v Ogden. That expansion of the commerce clause has become more acute in recent history.

Cases about federalism you may want to consider:
Kelo v New London

United States v Lopez