American Federalism: Blessing or Curse?

Third Quarter 2000

Third of a Four-Part Election-Year Series

The ground continues to shift in the always-changing relation between federal and state governments. As some see it, power is now shifting from the federal government back to the states, and that is a good thing. Ronald Reagan started it and even Democrat Bill Clinton has not stopped it. The federal government now sends bloc grants to the states for welfare services and allows plenty of room for the states to decide how to spend the money. Many of the states are now taking the initiative on health-care reform, unwilling to wait any longer for the lumbering federal government to act. More federal tax cuts appear to be in the offing. Governors are trusted; members of Congress are not. The states get things done; Washington dithers.

That is a myth, say others. The federal budget continues to grow, not shrink. The end of the budget deficit has come about because of sustained economic growth, not because of a cut back in federal spending. Even presidential candidate George Bush is not talking about ending Social Security or Medicaid or federal spending on education. The federal government continues to spend and to grow, for better or for worse.

Today's Battles

Inequalities in education will not be overcome, say some, unless national standards are set by the federal government. Too many states are not doing enough to improve education. To the contrary, say those on the other side, education is a state responsibility and more federal regulations and bureaucracy will make matters worse.

From the American founding, marriage law has fallen under state jurisdiction. It should stay that way, insist many opponents of gay "marriage." Let the states decide. Many proponents of gay unions argue, to the contrary, that basic civil rights should be settled at the federal level, just as the civil rights of African-Americans were established nationally and not left to the states.

The minimizing of federal welfare standards was a mistake, according to those who fear that the 1996 reforms will undermine anti-poverty efforts nationwide over the long term. The federal government should be spending more and requiring more of the states by way of assistance to the poor, not giving funds to the states with few strings attached. To the contrary, argue those who led the fight for welfare reform in 1996. State governments are close to where the need is; they are the ones that can be creative in meeting those diverse needs. The "one size fits all" approach of Washington's bureaucracy is part of the problem, not the solution.

At a conference in May, a discussion took place about the U.S. Supreme Court decision in 1925, Pierce vs. Society of Sisters. The state of Oregon had passed a law that required all children to attend state-governed schools, in essence shutting down religious schools. The Supreme Court held that the law was unconstitutional because it wrongly denied parents the right to educate and oversee the education of their children. At the May conference, a person on one side of the discussion lauded the Pierce decision as an example of how a higher level of government—at the federal level—did the right thing to distinguish what is governmental from what is not. The responsibility of parents to raise their children is not a matter of which level of government bears responsibility. The family is not a unit of any level of government. Neither the federal government nor a state or local government should have the right to turn a child into "a mere creature of the state."

A person on the other side of this debate argued, to the contrary, that the only way to preserve individual freedom and local traditions is to allow governmental and judicial decisions to be made at the lowest possible level. He made a states' rights argument that it was better for Oregon to be allowed to do what it did, even if it was wrong for families, than to allow a higher level of government to interfere. Eventually, Oregonians could correct their mistake on their own if they so desired.

The most important issue in the Pierce case, however, as the first person emphasized, was not the level of government but the distinction between family responsibility and government's jurisdiction, at whatever level. The Pierce decision has an important bearing on two of the most important debates of this election year—education and faith-based welfare services. With regard to education, our contention is that education is like the family in the sense that it should not be considered a department of state or a function of government in the first place. Consequently, the level of government policy making is a secondary, even though important, matter. There is no reason why local, state, and federal governments should not each play an appropriate role and cooperate in helping to fund and encourage education, because there is an important civic dimension to literacy and training. The first principle, however, should be parental "principalship" (primary responsibility) to choose from among a variety of schools, including non-government and faith-based schools, without any discrimination or favoritism by government at whatever level. Government's responsibility, at every level, should begin with recognition of the integrity of families and schools as non-govern-mental institutions and on that basis act to strengthen the civic order.

State, Federal and International

The most important principle internal to political federalism is that it allows a differentiation of government responsibilities among levels that are closest to the circumstances that require governance. From the beginning of the republic, for example, only the central government held responsibility for the military and only state and local governments held responsibility for police forces. Likewise, it is appropriate for states and local governments to deal with sewage systems, building codes, and zoning, while it is right for the federal government to regulate interstate commerce and enact environmental protection laws. Few people object to a national unemployment insurance program, because it can best deal with the threats to employment that arise from national and regional economic conditions. National and international economic conditions and a mobile population are also reasons for a federal income-insurance program for the elderly.

However, there are many policy questions that do not fit easily into either a federal, state, or local compartment. The biggest of these challenges appears in large metropolitan areas or economic regions that encompass many towns, counties, and two or more states. Think of transit and tax policies in the New York City region which includes parts of New York, New Jersey, and Connecticut. Think of the ecological health of the Chesapeake Bay that involves Pennsylvania, Maryland, Virginia, and the District of Columbia.

Whether government operates a police force, regulates commerce, or promotes education, the first principle is for it to distinguish what is nongovernmental (like families and schools) from that which belongs to government. The second most important matter is that clear distinctions be made, when they should be made, between levels of responsibility (such as leaving policing to the states and military defense to the federal government). The third and most difficult judgment concerns the mode of cooperation between levels of government and between government and non-governmental organizations where a complex and intricate network of diverse responsibilities exists. Education, welfare, employment, and health-care policies in larger metropolitan areas are examples. This is the arena in which the greatest confusion is possible and where wise political leadership is most important. Unwise politicians will simply throw money at these problems, or try to satisfy the dominant interest groups, or say that government is part of the problem and should simply get out.

The kind of public officials we should vote for this year are those who can sort out complex issues from simple ones, who can distinguish governmental from non-governmental responsibilities, and who can rise to the challenge of developing creative policy reforms that help clarify and coordinate the responsibilities of each appropriate party, including different levels of government.

And finally, we should note that questions about the appropriate level of government lead directly to many of today's most important international policy concerns. NATO, the World Health Organization, the World Trade Organization, and countless other international organizations have been created precisely because national states cannot deal with all environ-mental, health, defense, and economic affairs on their own. Europeans are now engaged in a highly complex federalizing process. The demands of global integration increasingly require that we face up to a larger federalizing task. Rejecting the very idea of a one-world, totalitarian government does not make the reality of international interdependence go away.

The American colonies that declared their independence from Britain and then declared themselves sovereign states soon found that their loose confederation was insufficient. Only the federal system allowed such a large country to be born and to grow. The American federal experiment, if it survives, coupled with the European one, if it is achieved, could go along way toward helping the nations of the world figure out how to cooperate federally in a way that upholds the integrity and relative independence of all.

—The Editors