U.S. Federalism Web Site

This section presents descriptions of the evolution of the relationship between the states and the national government. It includes a chronology of critical points in the evolution of U.S. federalism, with particular focus on the second half of the twentieth century. Finally, it offers some useful links for further exploration. The emphasis in this page is on the narrative that describes the changing relationship. If you are hungry, be warned: for some reason, historians of federalism have a penchant for metaphorical gateaux.

Laurence J. O'Toole (1993:29) points out that "history and theory have …been closely linked" in intergovernmental relations. Although there is some controversy over the degree to which the levels of government were truly separate in their actions during the first century of the republic, there is general agreement that there has been a progression in the shift in power since the founding of the country, away from the states and towards the national government.

Analysts and historians of federalism consider the changing nature of authority and flow of resources between national and state governments. Most analysts begin with characterizations of the federal system as either dual or unitary.

Here is a timeline of important periods in the evolution of federalism, with some discussion of the characteristics of these periods.

Founding to Civil War Federalism in the first century of U.S. history is often described as dual, with clear distinctions between the spheres of activity of state and national government. Competition between the two levels was chiefly over economic development and regulation. Critiquing the notion that this period was marked by competing or separated federal and state powers, Grodzins and Elazar have pointed out that even in this early period federal relationships were marked by partnership and cooperation. While there were few intergovernmental grants before the Civil War, the governments cooperated in establishing new territories and the transportation needed to open and exploit the new lands. At the same time, financial transfers betweens governments--so much a part of contemporary federalism--were virtually nonexistent. While some land grants were provided to the states, they were quite limited.
1760-1780s	Declaration of Independence, Articles of Confederation Constitution Commerce clause Tax and spend, general welfare	Hamilton and his colleagues, the original Federalists, believed only a strong central government could provide the new nation with the economic, political and military cohesiveness it would need to maintain its independence. The antifederalists saw such a government as the greatest threat to that new-found liberty, and feared that by creating a strong central government they were replacing one tyranny with another. For them, government of daily life was best carried out by groups that were closely bound by ties of kinship, belief and history--states and local governments. The national government would be the best locus for issues of diversity, with debate taking place among the states
1790-1800s	Tenth amendment--reserve clause	Political parties formed initially around the two positions: federalists in support of a strong national government and the Democrat-Republican party opposing the centralizing tendencies. The first change of parties, Jefferson succeeding Adams, was fueled in part by reaction against just the sort of central government overreaching the drafters had feared. The Alien and Seditions Acts were being used by Adams to stifle political opposition. The Virginia and Kentucky legislatures passed resolutions nullifying the acts. The election of Thomas Jefferson--and his accession with only a hint of a threat from Virginia's troops, which were then stronger than the national army--was the young nation's first successful transition between the different philosophies of federalism (Peterson, 1995).
1810s		The victory of Jeffersonian ideals was short-lived. The new government was increasingly active in commerce with the establishment of a bank, and the controversy it engendered served to reframe the Constitution. In ruling on this and other matters, the Marshall Court defined the role of the Supreme Court as a coequal with the executive and legislative branches. Establishing the lines between state and national government authority through its interpretation of the supremacy, commerce and contract clauses of the constitution, it supported a relatively expansive interpretation of the national government's economic authority.
1819	McCulloch v. Maryland- construes "necessary and proper" to favor expansion of national authority	In its 1819 ruling, McCulloch v. Maryland, the Court upheld the creation of a national bank. The court was asked to interpret whether "necessary and proper" limited the national government, in accordance with Jefferson's narrow construction of the meaning of the clause. Chief Justice John Marshall took the broad construction, interpreted the constitution not as a compact among sovereign states but a national constitution established by the people of the United States. Thus construed, "necessary and proper" meant the national government could take actions that were appropriate to implementation of its prescribed powers, and not only those that were indispensable. (Beer, 1992 :6) "The government is acknowledged by all to be one of enumerated powers. The principle that it can exercise only the powers granted to it...is now universally admitted. But the question respecting the extent of the powers actually granted is perpetually arising, and will probably continue to arise, as long as our system shall exist." Chief Justice John Marshall, McCulloch v. Maryland (1819)
1820s-1830s	States clash over tariffs. South Carolina declares right of state nullification of federal laws	The Jacksonians challenged the emerging economic dominance of central government and banking powers and sought to strengthen states and individual power. No simple restoration of an agrarian order was possible, however. In 1830, Northern and Southern states, always at economic odds, clashed over tariffs and, ultimately, slavery. Hamilton's fears that state factions would set aside property rights seemed to be confirmed by the Jacksonians, who opposed policies of the national government that favored strong commercial interests as antidemocratic, while equating states' economic control with personal liberty and economic decentralization. Although elected on a platform of states' rights, when a crisis of national unity threatened Andrew Jackson asserted the primary importance of maintaining a union. Opposing the tariffs, John C. Calhoun argued in support of the doctrine of nullification, warning that national majorities could override the liberty of minorities unless states had the right to nullify tyrannical laws. (Peterson, 1995). This "trial of sectionalism" as Beer calls it (1993) ultimately culminated in the Civil War.
	Doctrine of dormant commerce clause articulated in Cooley v. Board of Wardens	The notion of a "negative" or "dormant" Commerce Clause was articulated in Cooley v. Board of Wardens, giving states limited authority over local aspects of interstate commerce, absent conflicting federal legislation and provided it was otherwise within state authority. The ruling left final decisions to the Court, which would judge whether the matter under consideration was nationwide in scope, in which case state laws could not have jurisdiction (Benson:35). In the absence of Congressional action related to commerce (according to Lund, Congress did not legislate affirmatively in regards to the commerce clause until 1887), the Supreme Court could and did define the boundaries of state and national action.
1854	Pierce vetoes land grant for mentally handicapped	"If Congress is to make provision for [paupers], the fountains of charity will be dried up at home, and the several States, instead of bestowing their own means on the social wants of their people, may themselves through the strong temptations, which appear to the States as individuals, become humble suppliants for the bounty of the Federal Government, reversing their true relation to this Union." (Congressional Globe, 33d Congress, 1st session (May 1854) pp. 1061-63, cited in Vasey, 1958: 270-271)
1862	Morrill Act-land grant colleges	The Morrill Act of 1862 providing for land grants to states to support public institutions of higher education,was the first time the national government participated financially in a program of state welfare.
1860s	Civil war slave narratives	Doctrine of nullification laid to rest by force of arms. The most important national-state interactions in the first century revolved around slavery and its consequences. From the start, slavery embodied a fundamental contradiction between economic and personal liberty: humans treated as property. The issue repeatedly set South and North in opposition to one another: over how slaves should be counted; whether new territories could choose to permit slavery; and how they were to be treated when passing through non-slave states. The Civil War cast the national government as the protector of civil liberty against state incursions, with the fourteenth amendment the conduit through which national standards of personal rights were eventually funneled to the states. For the defeated South, however, these actions were seen as an absolute violation of personal and property rights by the national government. Conservative courts support states' unwillingness to act on civil rights.

Post-Bellum Expansion and Progressive Era Following the Civil War, diversity among states was no longer seen as a source of liberty. While individual states might lead with their progressive reforms, only the national government could take that agenda to all states. The national government became a more active regulator and reformer in the economic system, while state reforms focused on traditional areas of police power and services--hospitals, sanitation and public welfare. By the last two decades of the nineteenth century, the national government became the keeper of economic development, greatly expanding its role in supporting and regulating commerce. This growth of national authority, ostensibly controlling industries, was more often protective of the large commercial interests. Cutting across all levels of government, progressive political reforms included a movement towards more direct democratic devices such as secret ballots and initiatives, managerial reforms at all levels of government, a merit system, antitrust legislation, and an income tax. Like the antifederalists and Jacksonians before them, the Progressives sought to correct an imbalance between economic growth and personal liberty. Industrialization, urbanization and immigration created new problems that existing institutions were ill-suited to solve. State and local governments were absorbed with these problems, which seemed to be exacerbated by corruption and collusion between corporations and the national government. Progressive responses to the problems of modernization often began at local and state levels, in the governments that were struggling to cope with the consequences of the economic changes. Unlike earlier reactions to economic centralization, however, the reform agenda was then taken to the national level.
1880s 1887	First affirmative commerce clause actions by Congress after court rejects state laws on railroads, food, common carriers, utility regulation Interstate Commerce Act	As statute law replaced common law in states attempting to deal with the social and economic changes, efforts to develop uniform legal doctrines across the states were finally abandoned as unconstitutional (MacMahon:37). National regulation started in late 19th century, with such measures as the 1884 animal industry act for control of disease in cattle. State laws were often the stimulus for these national regulations. State actions to regulate railroads, rejected by the Supreme Court in 1886, led to the interstate commerce act in 1887. Similarly, late 1890 and early 1900 laws related to food, common carriers and utility regulation all led to national laws in the face of the Court's continued rejection of state actions. "Instances have not been wanting where the concept of interstate commerce has been broadened to exclude state action, and narrowed to exclude Congressional action." Felix Frankfurter, The Commerce Clause 76 (1937)
1887	The first program of cash rather than land grants	A program creating agricultural experiment stations included oversight that is a prototype for modern grants-in-aid: state accountability through audits and a requirement that the Secretary of the Interior certify state eligibility for the program and withold grants if conditions were not met (Hale and Palley, 1981:7-8).
1890s	Sherman Antitrust Act State railroad commissions, antitrust laws and lottery laws preempted 1894 income tax overturned	The Interstate Commerce Act of 1887 and the Sherman Antitrust Act of 1890 were part of the expansion of federal authority over commerce that took place during that period, often at the expense of states. Thirty state railroad commissions, for example, were replaced by a federal authority, as were existing state antitrust and lottery laws. (Collins, 1983). Although an income tax had been levied during the Civil War, the Supreme Court overturned an 1894 income tax provision as unconstitutional because it was not proportional.
1900s	"Stream of commerce" doctrine developed in price fixing ruling Mann Act child labor laws	A 1905 case involving price fixing by meat packers served to establish the doctrine of "stream of commerce", which applied national laws to any part of an activity if the whole took place among the states. Emboldened by these precedents, Congress enacted the Pure Food and Drug act in 1906. This was a dramatic movement into an area of traditional public health that had generally been under police powers of the states. The courts sustained such "federal police powers" (Shuman: 40) expansion into that area in the teens and twenties, upholding the Mann act and the pure food and drug act of 1906.
1913	16th amendment--income tax	The sixteenth amendment, adopted in 1913, stands as a watershed for modern federalism. The size of the tax was extremely modest by today's standards, but it created the foundation for twentieth century federalism, with its emphasis on intergovernmental transfers and the use of taxing and spending powers to further national policies.
1910s	tax incentives adopted, upheld--narcotics tax	Despite uncertainty as to the constitutionality of such a course, the national power to tax was quickly used to affect policy whether through incentives or prohibitions. In doing this the national government soon acted in areas once considered the domain of state police powers, as with a narcotics tax that was upheld in 1919 (Lund, 1963).
1922	Court rules that commerce disregards state lines .	By 1922, the Court ruled that commerce as a unit disregards state lines and national control of commerce--even intrastate--is not an invasion of state authority (p.115) However, state laws affecting health tended to be upheld in face of this. (Wright:116)
1920s	11 grant-in-aid programs Court rules that federal grants in aid are voluntary so it has no jurisdiction.	As the country moved from a primarily rural, agrarian society to an urban industrial one, large-scale social institutions developed to cushion some of the worst social dislocations caused by the changes. These were primarily private or local government --or party--activity. Even with the capacity to levy progressive income taxes, national efforts at social welfare programs were highly tentative at first. Nonetheless, by 1920 there were eleven grants-in-aid programs. Challenges to the legality of such grants were rejected by the court on the grounds that participation in the programs was voluntary on the part of the states and thus did not violate separation of powers. (O'Toole, 1993:7) The earliest such program in health, the 1921 Sheppard-Towner Act maternity and infancy health program aroused much opposition from state and professional groups, and was allowed to die in 1929. (Walker 1981)

Great Society and Viet Nam War Another period of national government activism began in 1964 with Lyndon B. Johnson's election. Elected with a strong mandate and large Democratic majorities in both houses, LBJ greatly expanded the national commitment to addressing social problems that beset society. The courts uphold crosscutting grants, coercive taxes and outright mandates in the face of growing challenges by states. Black asks the poignant question: "Is there an implied limitation on the federal powers, to the effect that they shall not be used to deal with some matters which lie within state authority? The prevalent modern answer is negative. But if that is right, the grave corollary is that federalism has no basis in firm constitutional law." (Black, 1963: 25)
1960s 1964, 1968	Great society--"creative federalism" Grants to many levels of government; projects and grants Cross-cutting conditions on grants	The "Creative Federalism" of that period was marked by an explosion of grants that reached beyond the states to establish intergovernmental links at all levels, often bypassing states entirely. Programs were aimed at both racial and economic injustice. Most of the new programs were funded through categorical and project grants, aimed at specific problems or groups and often bypassing states. Civil Rights Acts attached cross-cutting provisions on all grants.
1960s	1965--Highway beautification Act: cross-over sanction environmental and other regulation through partial preemption and substitution	The 1965 Highway Beautification Act was a nearly example of a cross-over sanction, in which aid for one activity was tied to performance of a different one. Water Quality Act (1965), Wholesome Meat Act (1967), Wholesome Poultry Act (1968) were examples of partial preemption. For example, the Wholesome Meat Act allowed the central government to take over in any state that had not adopted standards at least equal to the federal ones in three years.
1970s	growing conflict between states and national regulators national price controls	The growth of national government programs seeded a reaction. Programs overlapped and conflicted with one another. State administrators, growing increasingly capable in part as a result of the interaction around the grants, sought greater control over the programs. The War in Viet Nam, the oil crisis and the 1970's recession drained off the economic growth that had allowed the new programs to be set in place without disrupting taxpayers. Public reaction against the war eroded confidence in the national government. Relationships between state and national administrators, although often cooperative, became increasingly conflict-laden.

Chronology of U.S. Federalism
1760-1860	Founding to Civil War
1880-1920s	Post-Bellum Expansion and Progressive Era
1930s- 1960	New Deal and World War II, Postwar Prosperity
1960s-1970s	Great Society and Viet Nam War
1970s-1999	New Federalisms

New Deal and World War II Hamilton had argued that a strong national government was needed to respond to external enemies and to protect commerce. His theory was vindicated as a global depression and two World Wars led to the most powerful national government in the history of the United States. Although the New Deal was the most centralizing period of Federalism, the shift was well under way before FDR's election. The national government's greater flexibility in raising revenues following the adoption of the 16th amendment led to revenue sharing, with a pattern of federalism that continues today: advanced approval of state plans, formula funding or distribution, requirements to provide matching funds, and detailed reporting. Postwar Prosperity The national government played such a dominant role in the New Deal and World War II that some students of federalism have declared an end to federalism as the founders intended. However, state governments tended to keep pace with the national growth, and growth in national governmental power was shared to some extent with the states. From the New Deal onward, state-national relationships were closer than they had been in the first half of the nation's history, with different levels of government working together towards common objectives. Grodzin describes the intermingling of governmental responsibility as a "marble cake" in contrast to dual federalism's "layer cake."
1930s	New Deal: centralized response to national crisis Nationally-based welfare state	Although the courts initially rejected FDR's New Deal programs, his threat to add judges to the court until it voted his way shifted the balance and the court ultimately reversed itself, giving its approval to the crisis-driven centralization under way. The New Deal put forward a doctrine that a centralized response was needed to the national economic crisis. The national government assumed authority over areas of economic regulation and development that had been the states' domain, including labor relations and agriculture. It established a nationally based welfare state.
1937-1941	Court gives control over commerce to Congress. U.S. v. Darby	After a series of four to five decisions, only a single vote needed to shift to change the outcome. Beginning with a 1937 decision that upheld the National Labor Relations Act, the Court finally gave up on defining the national role in Commerce in the face of conflicting Congressional action. "The motive and purpose of a regulation of interstate commerce are matter for the legislative judgement upon the exercise of which the Constitution places no restriction and over which the courts are given no control." United Sates v. Darby, 312 U.S. 100 at 113 and 115 (1941) (McMahon 1972:47)
1940s	Marble cake federalism era	Many social support programs remained under state control, albeit within guidelines set nationally. State police powers even expanded as the states carried out the national programs (Walker, 1995). "The accretion of federal power has been piecemeal, much contested, often much agonized over, and legislatively qualified, and normally the outcome of emergency, or of powerful public pressure to stave off international or domestic disasters...Extensions of federal power since the New Deal have been remarkable for their assiduous respect for federalism". (Collins 1983: xviii):
1944	McCarran act delegates regulation of banking and insurance to states	The McCarran Act of 1944 confirmed that Congress' authority over commerce was broad, in this case extending to taxation and regulation of insurance. (Black, 1963:37))
1950s	21 new grant-in-aid programs 1946-1961 economic development--highway spending Commission on intergovernmental relations unsuccessfully seeks to return programs to states States' rights--"interposition" asserted in opposition to civil rights	Eisenhower attempted to reverse the centralizing trend in the national government's involvement in domestic policy, and established the Commission on Intergovernmental Relations to identify activities to return to the states. However, the commission found few such programs, and in the end no changes were implemented. (O'Toole, 1993) In the post World War II period, the courts for the first time asserted national authority in regards to civil rights under the equal protection clause of the fourteenth amendment. The confrontation pitted southern states as deniers rather than protectors of liberty against the national government. Nullification was revived as "interposition" as states sought to defy federal orders to integrate schools in the wake of Brown v. Board of Education. State legislators revived the theory that the Constitution represented a compact and passed resolutions calling for the use of the theory as a basis for challenging the Court. (Bennett, 1964: 196-221)

New Federalisms Beginning with Richard M. Nixon's administration there has been a series of efforts to reduce national control over the grants-in-aid programs and revise the character of federal involvement in general welfare spending. As the size of the federal budget has become a limiting factor in policy making, Congress has been increasingly willing to use mandates and coercive grants to achieve policy objectives during the 1970s and 1980s. This has further fueled a reaction against this regulatory federalism.
1970s 1972	Nixon--new federalism General Revenue Sharing	Arrange of administrative reforms with a devolutionary objective were carried out under Nixon, including decentralization of national programs to field regions, streamlining of services, and redirectionof funds towards general levels of government. Block grants and revenue sharing, enacted under Nixon, Carter and Reagan, reduce federal requirements, giving state grantees greater freedom while setting the stage for withdrawal of federal fiscal support. The attempts at retrenchment on federal grants have not marked a period of returning state power, however.
1980s	New Federalism II	Revenue cuts without matching spending cuts eventually produced a fiscally-driven impasse in government. A devolutionary agenda was promoted, but not carried out. 13 new block grant programs enacted. Court upholds the use of cross-over sanctions in tying highway funds to minimum drinking age.
1985	Garcia decision	In a ruling that eliminated virtually all barriers to federal regulation of state functions, the Supreme Court ruled that limits on the federal government's power to interfere with state functions rests with the political process
1995-1997	Contract with America Unfunded Mandates Reform Act Health Insurance Portability and Accountability Act Welfare Reform, Balanced Budget Act,	The 104th Congress enacted insurance reform, modeled in part on state insurance market reform laws. Implementation was carefully tailored so as not to preempt current state practices that exceeded the federal rules. While a pseudo-dual framework was retained, with states above all responsible for geographically defined elements such as defining pools of risk, this solicitude towards the states serves to underline the extent to which their authority ceded by Congress and revocable at will. Welfare block grants ostensibly devolved the program to states but also included major new restrictions on how the moneys could be spent.
1990s	Lopez decision	Recently the Supreme Court (having reached a nadir in federalism with the Garcia decision which effectively overturned the tenth amendment in favor of states' lobbying Congress) has shown signs of defining and separating areas of state and national authority. It decided that the national government has reached into what should be state police powers in the matter of guns near schools.