Library < Back ting 106% Page 40 of 53 < ili Chapter 3 a w Federalism Citizenship and the Dispersal of Power a WHAT'S TO COME * 42 The Division of Power * 45 The Evolution of Intergovernmental Relations * 54 Federal-State Relations * 61 Interstate Relations * 64 Federalism and Civic Engagement Today POT WARS Matthew R. Davies was a budding young entrepreneur. After graduating from college with a master's degree in business, the 34-year-old father of two began to produce a legal prod- uct with a vast sales potential in California and beyond. Like any good businessman, he filed the proper paperwork with the state, surrounded himself with lawyers and accountants to handle compliance issues, and began to hire and train a workforce of seventy-five employees. Soon afterward, however, Mr. Davies's business was shut down by federal authorities and now he faces years in prison and thousands of dollars in fines and legal fees after pleading to 10 felony counts for cultivation and sale of a controlled substance. The cannabis plant, grown The product Mr. Davies produced-marijuana-is legal to produce marijuana, has become the focus of controversy in the tug of war between federal and state grow and sell in California, but the federal government con- authority. (© Alamy Stock Photo) siders it a Schedule 1 substance, the use, possession, sale/ purchase, or distribution of which is prohibited. Davies is just one of an increasing number of marijuana entrepreneurs caught in the uncertain legal terrain between permissive state law and prohibitive federal law. These businesspeople see profit- able new opportunities in the sale of a substance their home states consider legal. And so do an increasing 84% Page 40 of 53 Library < Back ting 106% Page 41 of 53 < ili a number of legislatures that see potential tax revenue in the crop. Colorado, which passed voter-approved leg- islation permitting the sale of small quantities of marijuana for recreational use, estimates anywhere from $5 to $20 million a year could be raised from the legal sale of pot. Washington, with similar legislation and a 25 percent sales tax on marijuana, estimates as much as $500 million in new revenue could be realized. That is a lot of money for new schools, jobs initiatives, and health care programs. The problem is that these state laws fly in the face of federal law, which still considers marijuana a dangerous and illegal substance. w a As You READ • How is power dispersed in American federalism? • How have the powers of the national and state governments evolved over the nation's history? • What factors influence relations between national and state governments today? "We thought we could make a model of how this should be done,” Mr. Davies told one reporter. “To be looking at 15 years of our life [in prison).... If I had believed for a minute this would happen, I would never have gotten into this."2 By 2016, twenty-five states and the District of Columbia had passed legislation either permitting the sale and use of medical marijuana and 20 states and the District of Columbia had reduced penalties for the possession of small quantities of pot. Alaska, Colorado, Oregon, Washington and the District of Columbia have legalized small amounts of marijuana for adult recreational use. Public opinion has driven much of this change. The Pew Research Center recently found that 52 percent of Americans favor the legalization of marijuana use, with support spread across every generation except the elderly. And 60 percent of Americans believe the federal government should not enforce marijuana laws in states that have approved its use.4 Several candidates on both sides of the aisle in the 2016 presidential campaign voiced support for either legalization or decriminalization of pot. In the face of changing public opinion in the states, the Department of Justice issued new guidelines for the enforcement of marijuana laws, prioritizing enforcement in areas regarding the sale of marijuana to minors, its culti- vation on public lands, and illegal trafficking. For states such as Colorado and Washington that have enacted laws to authorize the production, distribution, and possession of marijuana for recreational purposes, the Department expects these states to establish strict regulatory schemes that protect the federal interests identified in the Department's guidelines. But the case of Mr. Davies stands out as an example of what can happen when federal laws come into conflict with state statutes and regulations. Conflict over enforcement of marijuana laws is just one example of the tensions that can arise between our national and state governments as a result of a feature of the American political landscape known as federalism. Federalism disperses authority among different levels of government, providing citizens with different points of access for voicing their concerns as well as differ- federalism Power-sharing ent units of authority with which to conform. This chapter focuses primarily on gov- arrangement between the national and state governments in which ernment at the national and state levels, but the nation's governmental structure is some powers are granted to the national government alone, some much more complex. In addition to the federal and state governments, the United powers are reserved to the states, States is composed of 3,034 county governments, 19,429 municipal governments, some powers are held concurrently, and other powers are prohibited to 16,504 town and township governments, and over 45,000 special and school dis- either or both levels of government. trict governments. Most of these governments have some taxing authority, and all conduct legal and fiscal transactions with other units of government. Relationships among these various levels of government evolve continually to reflect the changing political and financial cur- rents of the day, potentially affecting the lives of millions of people like Matthew Davies. I 3 Federalism 41 85% Page 41 of 53 Library < Back ting 106% Page 40 of 53 < ili Chapter 3 a w Federalism Citizenship and the Dispersal of Power a WHAT'S TO COME * 42 The Division of Power * 45 The Evolution of Intergovernmental Relations * 54 Federal-State Relations * 61 Interstate Relations * 64 Federalism and Civic Engagement Today POT WARS Matthew R. Davies was a budding young entrepreneur. After graduating from college with a master's degree in business, the 34-year-old father of two began to produce a legal prod- uct with a vast sales potential in California and beyond. Like any good businessman, he filed the proper paperwork with the state, surrounded himself with lawyers and accountants to handle compliance issues, and began to hire and train a workforce of seventy-five employees. Soon afterward, however, Mr. Davies's business was shut down by federal authorities and now he faces years in prison and thousands of dollars in fines and legal fees after pleading to 10 felony counts for cultivation and sale of a controlled substance. The cannabis plant, grown The product Mr. Davies produced-marijuana-is legal to produce marijuana, has become the focus of controversy in the tug of war between federal and state grow and sell in California, but the federal government con- authority. (© Alamy Stock Photo) siders it a Schedule 1 substance, the use, possession, sale/ purchase, or distribution of which is prohibited. Davies is just one of an increasing number of marijuana entrepreneurs caught in the uncertain legal terrain between permissive state law and prohibitive federal law. These businesspeople see profit- able new opportunities in the sale of a substance their home states consider legal. And so do an increasing 84% Page 40 of 53 Library < Back ting 106% Page 41 of 53 < ili a number of legislatures that see potential tax revenue in the crop. Colorado, which passed voter-approved leg- islation permitting the sale of small quantities of marijuana for recreational use, estimates anywhere from $5 to $20 million a year could be raised from the legal sale of pot. Washington, with similar legislation and a 25 percent sales tax on marijuana, estimates as much as $500 million in new revenue could be realized. That is a lot of money for new schools, jobs initiatives, and health care programs. The problem is that these state laws fly in the face of federal law, which still considers marijuana a dangerous and illegal substance. w a As You READ • How is power dispersed in American federalism? • How have the powers of the national and state governments evolved over the nation's history? • What factors influence relations between national and state governments today? "We thought we could make a model of how this should be done,” Mr. Davies told one reporter. “To be looking at 15 years of our life [in prison).... If I had believed for a minute this would happen, I would never have gotten into this."2 By 2016, twenty-five states and the District of Columbia had passed legislation either permitting the sale and use of medical marijuana and 20 states and the District of Columbia had reduced penalties for the possession of small quantities of pot. Alaska, Colorado, Oregon, Washington and the District of Columbia have legalized small amounts of marijuana for adult recreational use. Public opinion has driven much of this change. The Pew Research Center recently found that 52 percent of Americans favor the legalization of marijuana use, with support spread across every generation except the elderly. And 60 percent of Americans believe the federal government should not enforce marijuana laws in states that have approved its use.4 Several candidates on both sides of the aisle in the 2016 presidential campaign voiced support for either legalization or decriminalization of pot. In the face of changing public opinion in the states, the Department of Justice issued new guidelines for the enforcement of marijuana laws, prioritizing enforcement in areas regarding the sale of marijuana to minors, its culti- vation on public lands, and illegal trafficking. For states such as Colorado and Washington that have enacted laws to authorize the production, distribution, and possession of marijuana for recreational purposes, the Department expects these states to establish strict regulatory schemes that protect the federal interests identified in the Department's guidelines. But the case of Mr. Davies stands out as an example of what can happen when federal laws come into conflict with state statutes and regulations. Conflict over enforcement of marijuana laws is just one example of the tensions that can arise between our national and state governments as a result of a feature of the American political landscape known as federalism. Federalism disperses authority among different levels of government, providing citizens with different points of access for voicing their concerns as well as differ- federalism Power-sharing ent units of authority with which to conform. This chapter focuses primarily on gov- arrangement between the national and state governments in which ernment at the national and state levels, but the nation's governmental structure is some powers are granted to the national government alone, some much more complex. In addition to the federal and state governments, the United powers are reserved to the states, States is composed of 3,034 county governments, 19,429 municipal governments, some powers are held concurrently, and other powers are prohibited to 16,504 town and township governments, and over 45,000 special and school dis- either or both levels of government. trict governments. Most of these governments have some taxing authority, and all conduct legal and fiscal transactions with other units of government. Relationships among these various levels of government evolve continually to reflect the changing political and financial cur- rents of the day, potentially affecting the lives of millions of people like Matthew Davies. I 3 Federalism 41 85% Page 41 of 53 Library < Back ting 106% Page 42 of 53 < ili THE DIVISION OF POWER a w Following the American Revolution, the nation's Framers faced the problem of organizing a rapidly growing nation whose citizens cherished local rule. While history furnished ideas for power sharing within the national government—such separation of powers and checks and balances—it offered few workable models for nation-state relations. The individuals who framed the Constitution were forced to devise their own solution—a historic innovation called federalism. a Prevailing Models for Dispersing Power Prior to the Constitutional Convention, two models of intergovernmental relations predominated throughout the world: unitary and confederated (see the “Diagrams of Unitary and Confederated Forms of Government” figure). Under a unitary form, all power resides in the central government, which makes the laws. State or local govern- ments act primarily as local vehicles to administer and enforce national laws. Many of the Framers found this kind of distant government unacceptable and considered it a threat to personal liberty. This form of government characterized the British sys- tem against which the colonies rebelled and persists in many nations today, including England and France. By contrast, in a confederation, states and localities retain sovereign power over their own jurisdictions, yielding to the central government only limited authority as needed. This form of government—which characterized the government under the Articles of Confederation—was also clearly unacceptable to the Framers. It had led to many of the difficulties we discussed in Chapter 2. Confederations are, for the most part, rel- ics of the past. Very few modern nations employ this form of government because it slows the central government's ability to act. A confederacy does, however, characterize some intergovernmental organizations that include nation-states as members, such as the United Nations. Great Britain has a unitary form of government in which most authority is exercised by officials at the national level. (© Tim Graham/Getty Images) The Federalist Solution Even opponents of a strong national government understood that only a more “energetic” central power could deal with the pressing national issues that were inadequately addressed under the arrangements of the Articles of Confederation. These included a lack of control over interstate commerce and the absence of a national currency, which seri- ously limited the development of national markets. Most significantly, however, the national government lacked central taxing power, mak- ing it impossible to raise money to repay the substantial debts it accu- mulated during the Revolution. The Continental Congress could assess each state for taxes, but it had no power to enforce collection. The delegates to the Constitutional Convention faced the problem of 16 26 42 . AM GOV 87% Page 42 of 53 Library < Back ting 106% Page 43 of 53 < ili Diagrams of Unitary and Confederated Forms of Government a Unitary Government Confederation w a Arrows represent the flow of decisions and resources. Central State Local Unitary systems privilege central authority over state and local governments whereas confederate systems place the locus of power in state and local units of government. enumerated powers Powers specifically allocated to the national government alone by the constitution providing the central government with enough power to function effectively but not so much that it dominated the states. Federalism was their solution. In a federal system, four main attributes characterize power arrangements among levels of government: 1. Enumerated powers are those governmental powers specifically granted the national government by Article I, Section 8, of the U.S. Constitution. The power granted to Congress to declare war is one example. This section of the constitution also includes the so-called “elastic clause” authorizing Congress to make “all laws which shall be necessary and proper for carrying into execution the foregoing powers.” That is, if Congress has the power to do something, it must also have the authority to select reasonable means for doing it. For example, Congress can authorize the building of aircraft carriers as a means of carrying out its powers to provide for the common defense and to declare war these powers of Congress to carry out con- stitutionally enumerated functions its implied powers. But Congres and the presi- dent also exercise inherent powers, those powers that are part of the very nature of each institution and necessary for the institution to do the job for which it was cre- ated. For example, the president must have the power ise force as part of his duties as Commander-in-Chief. 2. Reserved powers are those granted by the Consucifically to the states. The Constitution places certain limits upon national And the Tenth Amendment reserves to the states or to the people all wersally granted to the national government. Many actions states take with regard to practing the health and welfare of their residents issue from their reserved powers. 3. Concurrent powers are shared jointly by the federal and state governments. For exam- ple, both have the power to tax, 4. Prohibited powers are den other or both levels of government. For example, states may not declare wa Neither the national nor state governments may grant titles of nobility. The following figuru avove uss Caampics or major powers in each category. Proponents of a federal system among our Framers felt federalism not only was a more practical solution to the sharing of powers but also served as an additional guarantee of implied powers Powers necessary to carry out constitutionally enumerated functions of government. inherent powers Those powers that are part of the very nature of the institution and necessary for the institution to do the job for which it was created. For example, the president must have the power to use force as part of his duties as Commander-in-Chief. reserved powers Powers constitutionally allocated to the states. concurrent powers Powers shared by both state and national governments. prohibited powers Powers denied one or both levels of government. 3 Federalism 43 88% Page 43 of 53 Library < Back ting 106% Page 44 of 53 < ili Attributes of U.S. Federalism a Powers of National Government Powers Reserved for State Governments Concurrent Powers Make war Regulate intrastate commerce Tax and spend w Coin money Protect health and safety Borrow money Pass laws Establish courts Admit new states a Charter local governments Regulate interstate commerce Charter banks and corporations Regulate voting Establish post offices Establish schools Raise army and navy Establish uniform naturalization laws Fix standard weights and measures Powers Prohibited- National Government Powers Prohibited States Powers Prohibited- National and State Capitation tax Make treaties Ex post facto laws Tax state exports Impair contracts Bills of attainder Preferential treatment for ports Tax exports Make war Grant titles of nobility The chart illustrates the powers primarily exercised by each respective level of government The town-meeting form of government, which permits local residents to act as legislative bodies, is largely a remnant of our colonial past; however, many New England towns still use them. (© Sandy Macys/Alamy Stock Photo) individual freedoms. Madison argued that the federal system offered a dual protection of citizens' rights. In The Federalist No. 51, he wrote: In the compound Republic of America, the power surrendered by the people is first divided between two distinct governments, and then the portion allot- ted to each subdivided among separate departments. Hence a double security arises to the rights of the people. The different governments will control each other, at the same time that each will be controlled by itself.7 For Federalists such as Madison, federalism pro- tected individual freedom, encouraged participation in national affairs, and enhanced public security. Antifederalists, however, remained suspicious of the power of the national government. They found par- ticularly worrisome the supremacy clause in Article VI, which declared federal law supreme in instances when national and state laws collided. Despite the addition of a Bill of Rights explicitly limiting the fed- eral government's ability to encroach on the rights of 44. AM GOV 89% Page 44 of 53 Library < Back ting 106% Page 45 of 53 < ili a individuals and states, Antifederalists remained uncomfortable with the federal arrangement well into the formative years of the new republic. They warned that the new federal system would unravel the bonds of citizenship that they believed flourished only in small, homo- geneous communities. To some extent, the debate over which conditions best foster citizen participation-small, like-minded communities, or larger, more diverse ones—persists. It seems clear, however, that a federal system is well suited to a country such as the United States, where regional interests must seek accommodation with broader national goals. w a THE EVOLUTION OF INTERGOVERNMENTAL RELATIONS Although the Constitution provides ground rules for the federal allocation of power, the bal- ance of power among various levels of government has not remained static. It has ebbed and flowed over the course of the past two and a quarter centuries, making federalism a dynamic force in our nation's history. The National Government Asserts Itself: 1789-1832 In the early days of the new republic, former colonial allies disagreed heatedly about how much power the Constitution granted the federal government. The Constitution left unan- swered all sorts of questions regarding national and state power, including the meaning of terms and phrases such as commerce or necessary and proper. It was left to the U.S. Supreme Court to determine the meaning of these terms and how they impacted federal- state relations. One of the first cases in which the court was asked to deal with such matters dealt with the formation of a national bank. Federalists in the new government, such as the treasury secretary, Alexander Hamilton, advocated exercising strong national authority in the arena of finance and commerce, urging President Washington to support his plans for a national bank that would finance the construction of canals and roads. Secretary of State Thomas Jefferson opposed Hamilton's plan, arguing that a national bank favored northern industry over southern farming and represented unfair competition for state financial institu- tions. Congress authorized a twenty-year charter for the bank in 1791, setting in motion a schism between supporters of Hamilton and support- ers of Jefferson that led to the growth of the nation's first political parties. Congress neglected to renew the charter of the First Bank of the United States, which expired in 1811. However, it established a Second Bank of the United States in 1816, once again raising the ire of state banking interests. Maryland reacted by enacting a tax on operations at the bank's Baltimore branch, hoping to drive it out of business. The bank's clerk, James McCulloch, refused to collect the tax, argu- ing that a state could not tax an institution created by the national government. After losing his battle in state court, McCulloch appealed his case to the U.S. Supreme Court, where John Marshall, a longtime Federalist supporter, presided as chief justice. Marshall's court was asked to decide two issues: Alexander Hamilton (1757-1804) Thomas Jefferson (1743-1826) (1) Did the national government have the author- championed a strong federal broke with Hamilton, arguing that ity to establish a national bank, and (2) if so, could government with the power to a national bank favored northern a state tax the bank's operations within its borders? take the lead in the nation's industry over southern farming. In his landmark decision, McCulloch v. Maryland economic development. (© Photo (© Burstein Collection/Corbis/VCG via Researchers, Inc.) Getty Images) (1819), Marshall ruled against state interests on both 3 Federalism 45 90% Page 45 of 53
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