Article I, Section 8, Clause 1: Taxes, Duties, etc.

Panel Recap: Localism and Democracy

At the inception of the American Constitution Society, just eight years ago, this panel might well have been viewed as an anomaly. Federalism was the watchword of conservatives struggling to constrain the power of the national government. How times have changed. As Ernie Young noted in his pre-conference blog post, "During the Bush years, progressives trained since the 1960's to disparage state autonomy as indelibly tainted by racism rediscovered the importance of state policy diversity. They defended California's right to go its own way on environmental policy and Massachusetts' prerogatives to allow gay marriage at home and protest human rights violations abroad." The result has been a flourishing progressive federalism movement—or more accurately, as several panelists noted, a federalism without political valence. The four panelists last Saturday spoke to divergent features of today's federalism. What united their presentations was a sense of the dynamism and possibility of the new federalist movement.

Video courtesy of Yale Law School.


First to present were Ilya Somin and Ernie Young, who brought opposite perspectives to the question of how diminishing loyalties to particular states have altered the course of federalism. Somin argued that lower barriers to inter-state mobility promote federalism by facilitating "voting with your feet," even as the rise of federal funding reduces states' incentives to attract tax revenues. Young argued, to the contrary, that a resurgence of state loyalties is needed to foster rich cultures of federalist innovation within the states.

 Richard Schragger and Ethan Leib, next to speak, turned to the details of implementing progressive federalism. Schragger made an impassioned pitch for "federalism all the way down" in the tradition of Justice Brandeis, looking to cities rather than states as the real cradles of policy innovation. He argued for a related kind of localism as well, suggesting that "progressives should reassert the relationship between political and economic decentralization." Leib, citing his own experience with a team that seeks to revise the California Constitution, discussed how progressives might focus on state constitutional conventions as immediate opportunities to facilitate progressive change.

Heather Gerken, in her commentary on the panel, sought to connect its themes with those of the Individual Rights panel that preceded it. She argued that the traditional division between rights and structure as constitutional paradigms has limited progressives in their efforts to promote minority rights. Drawing examples from the struggle for racial justice and from her own work on dissenting by deciding, she argued that progressives should embrace federalism as a new structural language for the values of participation and representation.

Along with the panelists and questioners, moderator Judith Resnik suggested several avenues for further thought. First, what is the relevance of trans-local organizations of government actors (what Resnik, along with Josh Civin and Joe Frueh, have called "TOGAs") in progressive federalism? Second, how limiting are the challenges of immobility in American society? Third, what should progressives do about the currently dysfunctional governance of major states?

I'll close by suggesting a few others. One important question is the extent to which federalism will remain without political valence. Are we likely to see a kind of bifurcated federalism, with liberals and conservatives favoring different versions? Another question: Will governance at the local level reproduce the power dynamics of governance at the national level, or—as Gerken suggests—does it afford unique representational opportunities? Finally, given the present Democratic control of Congress and the presidency, will liberals need to endure a future period in the political wilderness in order to heed Justice Brandeis's call—channeled by Schragger—to "end this business of centralization" and "go home, back to the states" to "do their work"?

The Promise and Peril of Federalism in the 21st Century

Crosspost from Balkinization

American federalism faces both great promise and serious dangers over the next few years. One of the most important advantages of federalism is the ability to “vote with your feet” – to leave a state with oppressive or ineffective policies and move to a better one. Modern technology has greatly reduced the moving costs that previously made interstate migration difficult.  Information about different jurisdictions is easier to get than ever before. Increasing mobility and declining information costs give state and local governments stronger incentives to adopt policies that will be attractive to migrants. Revenue-hungry state governments know that valuable taxpayers will depart if they raise taxes too high or provide poor public services.

Some claim that federalism has lost its value because most Americans no longer feel any strong attachment to state governments. Yet this change may actually make federalism more effective. People who do not feel an attachment to their states are more willing to vote with their feet. This strengthens the incentive of state and local governments to adopt policies appealing enough to keep migrants from leaving. In an increasingly complex and  diverse society, federalism is also potentially more valuable than ever in its traditional role of providing divergent policies for people with differing preferences.

Unfortunately, American federalism is imperiled by the ongoing growth of federal power, especially the increasing dependence of state governments on federal funds. Our system has been successful in part because state governments have historically been forced to raise most of their revenue themselves. State governments that raise their own funds have strong incentives to adopt policies that promote economic growth and attract potential migrants. A state that falls behind its rivals is likely to lose its tax base. But states that can rely on federal funding to meet their fiscal needs face much less competitive pressure and are therefore less likely to adopt good policies. Moreover, federal grants to state governments enable Washington to reduce policy diversity between states, since Congress routinely attaches conditions to its grants that mandate uniformity.

The explosion of federal spending since the financial crisis of 2008 has made states more dependent on federal funding than ever before. In 2009, federal grants-in-aid constitute some 25% of total state revenue, up from less than 20% in 2007. For the first time, federal grant money has become the single largest source of state revenue. The Obama Administration expects federal funding for states to remain at this abnormally high level for years to come. Even when the recession ends, it will be politically difficult to cut federal grants back to previous levels. If Congress passes a major health care bill, federal grants to states will increase still further.

Federalism has also been weakened by the expansion of Congressional regulatory authority. The federal government has come to regulate almost every aspect of American society. This trend accelerated under the Bush Administration, which pushed through legislation expanding federal control of education and health care, and supported federal preemption of a variety of state laws, including ones permitting assisted suicide and the use of medical marijuana. The more policy areas come under federal control, the less the scope for interjurisdictional competition at the state and local level.

Unfortunately, state governments are often complicit in the overexpansion of federal power. States routinely lobby for increased federal funding. For their part, most voters have little understanding of federalism issues. As a result of such public ignorance, overextension of federal authority is rarely punished at the polls.

There is no easy way to limit or roll back the growth of federal power. Increasing public understanding of the problem is a necessary but difficult first step. The courts can also help by enforcing constitutional limits on federal authority. Nonlawyers rightly react with disbelief when they learn that Supreme Court has interpreted Congress’ power to regulate “Commerce . . . among the several States” expansively enough to uphold a ban on the possession of medical marijuana that was never sold in any market or left the state where it was grown. The Court has similarly erred in interpreting Congress’ power to spend for “the General Welfare” so broadly as to legitimize expenditures for local porkbarrel projects such as the “Bridge to Nowhere” that blatantly benefit parochial local interest groups at the expense of nation as a whole. Courts obviously cannot rein in federal power all by themselves. But they can provide a useful corrective.

The 21st century could be an extraordinarily successful time for American federalism -  but only if we restrain the growth of federal power.


Ilya Somin is Associate Professor of Law at George Mason University School of Law. He will be appearing on Saturday's "Localism and Democracy" panel with Rich Schragger (University of Virginia School of Law, "Federalism All-the-Way-Down"), Ernest Young (Duke University School of Law, "Preserving Democracy's Laboratories"), and Ethan Leib (University of California Hastings College of the Law, "Constitutional Conventions: Getting 20/20 Vision About Them by 2020").

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