AMERICAN FEDERALISM, 1776 TO 2000: SIGNIFICANT EVENTS
CRS Report for Congress
American Federalism, 1776 to 2000:
Updated November 30, 2000
Analyst in American National Government
Government and Finance Division
Michael K. Fauntroy
Analyst in American National Government
Government and Finance Division
Congressional Research Service The Library of Congress
American Federalism, 1776 to 2000: Significant Events
Since ratification of the Constitution, which established a union of states under
a federal system of governance, two questions that have generated considerable
debate are: What is the nature of the union? What powers, privileges, duties, and
responsibilities does the Constitution grant to the national government and reserve to
the states and the people? During the 211-year history of the Constitution, these
issues have been debated time and again and have shaped and been shaped by the
nation’s political, social, and economic history.
During the pre-federalism period, the country waged a war for independence and
established a confederation form of government that created a league of sovereign
states. Deficiencies in the Articles of Confederation prompted its repeal and the
ratification of a new Constitution creating a federal system of government comprised
of a national government and states. Almost immediately upon its adoption, issues
concerning state sovereignty and the supremacy of federal authority were hotly
debated and ultimately led to the Civil War.
The period from 1789 to 1901 has been termed the era of Dual Federalism. It
has been characterized as an era during which there was little collaboration between
the national and state governments. Cooperative Federalism is the term given to the
period from 1901 to 1960. This period was marked by greater cooperation and
collaboration between the various levels of government. It was during this era that
the national income tax and the grant-in-aid system were authorized in response to
social and economic problems confronting the nation. The period from 1960 to 1968
was called Creative Federalism by President Lyndon Johnson’s Administration.
President Johnson’s Creative Federalism as embodied in his Great Society program,
was, by most scholars’ assessments, a major departure from the past. It further
shifted the state-national power relationship toward the national government through
the expansion of grant-in-aid systems and the increasing use of regulations.
Contemporary federalism, the period from 1970 to the present, has been characterized
by shifts in the intergovernmental grant system, the growth of unfunded federal
mandates, concerns about federal regulations, and continuing disputes over the nature
of the federal system. Some of the major disputes during this period were decided by
the Supreme Court which ruled, more often than not, in favor of the States.
Introduction ................................................... 1
Pre-Federalism Period: 1775 to 1789.................................2
Dual Federalism Phase I: 1789 to 1865...............................4
Dual Federalism Phase II: 1865 to 1901..............................8
Cooperative Federalism: 1901 to 1960..............................10
Creative Federalism: 1960 to 1968.................................12
Contemporary Federalism: 1970 to 2000............................13
American Federalism, 1776 to 2000:
In 1789, thirteen years after the signing of the Declaration of Independence and
eight years after ratification of the Articles of Confederation, which established a
league of sovereign states, the nation repealed the Articles of Confederation and
ratified a new Constitution creating the United States. Since its ratification the
Constitution, which established a union of states under a federal system of
governance, two questions have generated considerable debate: What is the nature
of the union? What powers, privileges, duties, and responsibilities does the
Constitution grant to the national government and reserve to the states and to the
people? During the 211-year history of the Constitution the answers to these
questions have been debated time and again and have shaped and been shaped by the
nation’s political, social and economic history.
What is federalism? According to James Q. Wilson and John DiIulio, Jr., it is
a system of government “in which sovereignty is shared [between two or more levels
of government] so that on some matters the national government is supreme and on
others the states, regions, or provincial governments are supreme.”1 There are three
essential features that characterize a federal system of governance. First, there must
be a provision for more than one level of government to act simultaneously on the
same territory and on the same citizens. The American federal system is composed
of a national government and the 50 states, both recognized by the Constitution.
Local governments, within states, while not mentioned in the Constitution, are
nevertheless key players in American federalism. Their power to regulate and
legislate is derived from state Constitutions.
Second, each government must have its own authority and sphere of power,
though they may overlap. When state and federal authority conflict, federal law is
supreme under the Constitution. Article I, Sec. 8 of the Constitution delegates certain
enumerated powers to the national government that include the exclusive power to
mint currency, establish and maintain an army and navy, declare war, regulate
interstate commerce, establish post offices, establish the seat of national government,
and enter into treaties. The Constitution reserves powers not granted to the national
government to states, or the people, and it establishes certain concurrent powers to
be shared between state and national governments including the power to tax. In
addition, the Constitution prohibits the exercise of certain powers or actions by both
state and national governments including taking private land without just
1 Wilson, James Q. and John J. DiIulio, Jr. American Government Institutions and Policies.
Lexington, D.C. Heath and Company, 1995. p. A-49.
compensation; establishing a national religion; or prohibiting the free exercise of
Third, neither level of government (federal or state governments) can abolish the
other. The Civil War was fought not only on the question of slavery but also central
to the conflict were questions of states’ sovereignty including the power to nullify
federal laws or dissolve the Union.
This report identifies several significant eras and events in the evolution of
American federalism and provides a capsule description or discussion of each. It
should be noted that among experts in the field of federalism there may be a general
consensus concerning the evolution of American federalism; however, the choice of
events and scholarly interpretations of such events may vary and are by nature
Pre-Federalism Period: 1775 to 1789
During this period, the former colonists successfully fought the War of
Independence and established a national government under the Articles of
Confederation. Disenchanted with the functioning of the national government, the
states called a Constitutional Convention with the aim of addressing the deficiencies
in the Articles of Confederation. Instead, the delegates drafted and the states ratified
a new Constitution that created a federal system of government.
1776–Declaration of Independence. In the midst of the Revolutionary
War, which lasted from 1775 to 1783, delegates to the Continental
Congress convened in Philadelphia and on July 4, 1776 adopted the
Declaration of Independence. Each of the former colonies also
established state governments to replace the colonial charters. The
Continental Congress was given the power to carry on the war effort.
1777–Drafting Articles of Confederation. The Continental Congress
drafted the Articles of Confederation, which defined the powers of
the Congress. Leery of a strong central government, the former
colonists created a Confederation or “League of States” that was
state-centered rather than nation-centered.
1781–Articles of Confederation approved by the States. Under the
Articles of Confederation legislative, judicial, and executive powers
rested with Congress. The Articles of Confederation established a
Congress comprised of one representative from each state; it limited
the power of the central government; and it delegated to the states the
power to levy taxes and regulate commerce. The Confederation
Congress was given the power to declare war, make treaties, and
maintain an army and navy. The Articles of Confederation had several
noteworthy flaws that made it ineffective: 1) it did not provide for an
executive to administer the government, 2) the national government
lacked the power to tax, and 3) it lacked the power to regulate
examination of the Articles of Confederation was prompted by a post-
Revolutionary War economic depression; rebellion in Massachusetts
among debt ridden former soldiers, led by Daniel Shays (Shays
Rebellion); concerns about the ability of the Confederation to support
its currency or meet domestic and foreign debt incurred during the
war; issues surrounding westward expansion; and state tariff conflicts.
A group later known as Federalists, led by Alexander Hamilton, John
Jay, and James Madison sought support for a strong central
government that could deal with internal insurrections, arbitrate state
tariff conflicts and other conflicts among states, and manage westward
expansion. Members of the group called for a Constitutional
Convention in 1787 to reconsider the Articles of Confederation.
1787–Drafting a New Constitution. A Constitutional Convention met in
Philadelphia from May until September and drafted a new
Constitution. Under the new Constitution the central government, “...
in order to form a more perfect union,” was given additional powers
that included the power to levy taxes and control commerce among
states and with foreign countries. In addition, the Convention created
three co-equal branches of government – executive, judicial, and
legislative. In a compromise (Connecticut Compromise) between rival
plans offered by Virginia and New Jersey delegates, the Constitution
called for the creation of a legislative branch composed of two
chambers. Members of the House of Representative from each state
were to be elected by the people of that state based on state
population. The Senate would be comprised of two Senators from
each state elected by their respective state legislatures. The
Constitution included provisions that ensured the supremacy of federal
laws (Article VI), but also recognized state powers and the power of
the people. (Amendment X).
1788–Campaigning for a New Constitution. The Federalist, a series of 85
essays by Alexander Hamilton, John Jay, and James Madison, writing
under the pen name Publius, was published during this period. The
papers provided the philosophical underpinning in support of the new
Constitution. Those opposed to the new Constitution (labeled Anti-
Federalists but calling themselves Federal Republicans) also published
articles under the pen names Brutus and Cato, arguing for support of
a federal system of governance that would protect the state
governments from the tyranny of the national government. The Anti-
Federalists or Federal Republicans would eventually evolve into the
Democratic Republican party that ascended to power with the election
of Thomas Jefferson in 1801.
Dual Federalism Phase I: 1789 to 1865
The concept of dual federalism is the idea that the national and state
governments were equal partners with separate and distinct spheres of authority.
Despite the doctrine of implied powers, as first enunciated in McCulloch v. Maryland,
the federal or national government was limited in its authority to those powers
enumerated in the Constitution. There existed little collaboration between the
national and state governments and occasional tensions over the nature of the union
and the doctrine of nullification and state sovereignty. The states rights debate and
the nature of the union – whether the Constitution created a league of sovereign states
or an inseparable union – was a major issue in the Civil War.
1789–Constitution Approved by the States. State ratifying conventions
convened and ratified the new Constitution, which required 3/4ths (9)
of the states to vote for its approval.
1801–The Federalist Period. The period takes its name from the dominant
political party of the time, which believed in a strong central
government. Its leaders included George Washington, Alexander
Hamilton, John Adams. They were opposed by Anti-Federalists or
Democratic Republicans, such as Thomas Jefferson, who argued
against a strong central government and for state-centered
governance. In 1790, the federal government assumed responsibility
for the war debt, which some have called an early form of federal aid.
In 1791, the first ten amendments—the Bill of Rights—were added to
the Constitution after being ratified by 3/4ths of the states. The Tenth
Amendment protected the rights of the states and declared that all
powers not expressly delegated to the central government by the
Constitution were reserved for the states. This laid the foundation for
the concepts of states rights, limited national government, and dual
spheres of authority between state and national governments.
In 1791, Congress established the Bank of the United States at the
urging of Alexander Hamilton. Thomas Jefferson opposed the idea of
a national bank. Congress granted the Bank a 20-year charter.
Protracted debate over the constitutionality of the Bank by pro- and
anti-bank factions led to the defeat of an effort to renew the Bank’s
charter in 1811. The charter renewal effort was defeated partly
because of the restraints the Bank put on state chartered private banks
in an effort to control inflation and because some viewed the concept
of central banking as a attack on state sovereignty. Years later the
central or national bank controversy was at the center of the debate
concerning the enumerated powers clause of the Tenth Amendment.
1798–The Doctrine of Nullification. A Federalist-controlled Congress in
1798 passed the Alien2 and Sedition3 Acts in an attempt to silence
Jeffersonian Democratic-Republican critics of the undeclared war with
France. In response, Democratic-Republican controlled legislatures in
Kentucky and Virginia passed resolutions supporting the concept of
state-centered federalism and nullifying the Acts as unconstitutional.
The doctrine of nullification held that any state could suspend within
its boundaries the operation or implementation of any federal law it
deemed to be unconstitutional. The Alien and Sedition Acts played
a large part in the defeat of the Federalist party; they expired before
the Supreme Court could hear a challenge to them.
1800s–Internal Improvement Debate. During this period there was
significant debate concerning the role of the national government in
the provision of roads and canals as a means of encouraging
settlement and aiding commerce. The debate raised questions about
whether the national government could participate in such activities
without a constitutional amendment that provided explicit authority
or whether such activities should be undertaken solely by states and
1815–States’ Rights Doctrine. The Hartford Convention, which was
called to protest the economic hardships endured by New England
states during the War of 1812, attempted to assert the “states’ rights
doctrine.” The convention urged states to protect citizens against the
acts of Congress not authorized in the Constitution.
clause of Article I of the Constitution. In 1816 the central bank was
rechartered as the Second Bank of the United States. In 1819 the
constitutionality of Congress’ authority to charter a national
bank—the Second Bank of the United States—was upheld by the
Supreme Court in McCulloch v. Maryland under the doctrine of
implied powers and the necessary and proper clause of Article I of
the Constitution. Chief Justice John Marshall, in writing the Supreme
Court’s unanimous decision in support of Congress’ constitutional
authority to establish a national bank, acknowledged that the national
government was limited to powers enumerated in the Constitution
(expressed powers), but stated that Article I also allowed the national
government (Congress) to pass such laws “necessary and proper” to
carry out powers and duties enumerated by the Constitution. Thus,
the establishment of a national bank, though not explicitly sanctioned
by the Constitution, nonetheless was an appropriate activity, under the
doctrine of implied powers, that allowed the national government to
carry out express powers, duties, or authority such as levying and
2 1 Stat 571 and 1 Stat 577
3 1 Stat 596
collecting taxes, issuing currency, and borrowing funds. The Bank
continued to be unpopular with Democratic-Republicans and in 1832,
through political maneuvering, President Andrew Jackson, who
opposed the Bank and characterized it as a “prostration of our
government for the advancement of the few at the expense of the
many,”4 severely crippled the Bank by transferring its funds to state-
chartered private banks until its charter expired in 1836.
McCulloch v. Maryland5 settled the question of national supremacy
for a time. Justice Marshall’s interpretation of the Constitution was
premised on the notion that the national government was the creation
of the people and not the states and that Article VI established federal
law as the supreme law of the land (supremacy clause). Justice
Marshall wrote that the power to tax involves the power to destroy. If
the Bank, an entity of the federal government, could be taxed out of
existence by the states it would be a breach of Article VI, one of the
fundamental principles of the Constitution – the supremacy of the
addressed the issue of the scope of Congress’ authority under the
commerce clause (Article I). The case involved a dispute over the
use of the Hudson River. The New York state legislature had granted
a company the exclusive right to the use of the river that was in
conflict with Congress’ granting of a license to another ship. The
Supreme Court ruled that the commerce clause of Article I granted
Congress the power to regulate commercial activity and that the
power to regulate commerce had no limits except those expressly
stated in the Constitution. The Court prohibited the state from taking
any action that would interfere with the free use of rivers and harbors.
In 1828, John C. Calhoun of South Carolina, then Vice President in
the Andrew Jackson Administration, argued against the imposition of
a law passed by Congress that placed a tariff on domestic raw
materials and reduced protection against imported woolen goods.
Calhoun’s theory, which was published as the South Carolina
Exposition and was to be used later by Southern states in their efforts
to maintain the institution of slavery, contended that the national
government was but a servant of the states and that the Constitution
was a compact that directed the national government as an agent of
4 Jackson, Andrew. For and Against the Bank Renewal Bill. Andrew Jackson: Veto Message.
In The Annals of America. Chicago, Encyclopedia Britannica, Inc., 1968. v. 5. p 535.
5 McCulloch v Maryland, 17 US 316, 4 Wheat 316, 4 Led 519 (1819).
6 Gibbons v. Ogden, 22 US 1, 9 Wheat 1, 6 Led 23 (1824).
7 Calhoun, John C., The Essential Calhoun: Selections from Writings, Speeches, and Letters,
Clyde N. Wilson ed., New Brunswick, Transaction Publishers, 1992. p. 59-60.
the states in its actions. According to Calhoun’s theory, the Supreme
Court did not possess the power to rule on the validity of the actions
of Congress, for it too was only an agent of the states. Calhoun’s
theory of nullification would have allowed a state to declare a federal
law null and void within that state unless 3/4ths of the states ratified
an amendment that granted Congress the power to enact the law. A
state that challenged or nullified the law could either abide by the law8
1830–Webster/Hayne Debate on the Doctrine of Nullification. In
January, the Senate of the United States was the venue in which
Senators Robert Y. Hayne of South Carolina and Daniel Webster of
Massachusetts debated the issue of state sovereignty concerning a
recent tariff act passed by Congress. Senator Hayne described the
nation as a league or confederation of member states and argued that
a state could refuse to obey any law passed by the Congress under the
states’ rights or nullification doctrine. During the debate Senator
Hayne, who believed in limited national government argued “Liberty
first and Union afterwards.” Senator Webster, in response, argued
that the Constitution was the creation of the people and not the states
and retorted “Liberty and union, now and forever, one and
1832–South Carolina’s Nullification Ordinance. The South Carolina
legislature passed an Ordinance of Nullification, which attempted to10
prohibit the implementation of Federal Tariff Acts of 1828 and
183211 under the banner of state sovereignty and the doctrine of
1842–Testing the Constitution’s Supremacy Clause and States’ Rights
Doctrine. In Prigg v. Pennsylvania,12 the United States Supreme
Court ruled as unconstitutional state-passed “personal liberty” laws
enacted by northern states to protect free blacks and fugitive slaves.
The Supreme Court ruled that such laws were in conflict with the13
Fugitive Slave Act passed by Congress in 1793, and thus violated the
supremacy clause of the Constitution.
8 O’Connor, Karen and Larry J. Sabato. American Government: Roots and Reform, New
York, McMillan Publishing Company, 1993. p.71.
9 Webster, Daniel. Congressional Debates. Mr. Foot’s Resolution. 21st Cong., 1st Sess.
Washington, In Gales and Seaton’s Register, v. 6, part 1. Gales and Seaton, 1830. p. 80.
10 4 Stat. 270.
11 4 Stat. 583.
12 Prigg v. Pennsylvania, 41 US 539, 16 Pet 539, 10 Led 1060 (1842).
13 1 Stat. 302.
1850–Prelude to the Civil War. The Fugitive Slave Act of 185014 was
passed by Congress in an effort to preserve the union. In 1854 the
Wisconsin Supreme Court declared the Fugitive Slave Act of 1850
unconstitutional. The U.S. Supreme Court overturned the State
Supreme Court decision, which involved Sherman Booth, a noted
abolitionist who freed Joshua Glover, a fugitive slave. The Wisconsin
legislature, enunciating the doctrine of nullification and states’ rights,
declared null and void the Supreme Court decision that reversed the
State Supreme Court decision. In 1857 the U.S. Supreme Court in
Scott v. Sandford15 rebuffed northern abolitionists and declared the
Fugitive Slave Act constitutional.
1860–The Civil War: Testing Federalism. Civil War addressed two
central issues: 1) the role of the federal government and 2) the nature
of the union. Slavery accelerated tensions between nation-centered
and state-centered concept of the federal system. On the one hand,
there were those who argued that the union was but a league of
sovereign states and that each state had the power to nullify federal
laws within its boundaries or ultimately secede from the union. On the
other side were those who believed that the union was indestructible,
created not by the states but by the people delegating to the states and
the national government certain limited authority enunciated in the
Constitution. The question of the nature of the union was resolved in
favor of a nation-centered concept of federalism.
The role of the national government was also profoundly influenced
by the Civil War. Before the Civil War, the role of government was
generally characterized by decentralization. The national government
acted as servant to the states. During the War, state militia and state-
recruited volunteers were replaced by a policy of federal conscription
and the national government reclaimed control over currency and
banking, which had been delegated in large part to the states during
Dual Federalism Phase II: 1865 to 1901
Although the era of dual federalism continued, this period was marked by erratic
but increasing presence of the national government into areas that had previously been
the purview of the states. The Sherman Anti-trust Act, the Interstate Commerce
Commission Act, as well as the Twelfth, Fourteenth, and Fifteenth Amendments were
significant events that pushed federal authority into areas such as the power to
regulate business and the economy, as well as civil rights. In the midst of the
industrial revolution, in an effort to control the monopolistic tendencies of business,
Congress passed legislation that attempted to control commerce. Congress’ authority
14 9 Stat. 462.
15 Scott v. Sandford, 60 US 393, 19 How 393, 15 Led 1123 (1842).
to control commerce was at the center of several legal disputes. In a series of court
cases, the power of the national government (Congress) to regulate commerce was
upheld. Two of the more notable laws are the Interstate Commerce Commission Act
of 1887 and the Sherman Anti-trust Act of 1890. Court cases included Munn v.
Illinois16 and Wabash, St. Louis, and Pacific Rail Road v. Illinois17 rendered in 1886,
in which the Court held that the state could not regulate rail rates if, as a consequence,
it affected a portion of the rate charged in transportation of goods across state lines.
In the area of civil rights, the Court was far more restrictive in its interpretation of the
Fourteenth Amendment’s equal protection, due process and privileges and immunities
clauses. In a series of cases, including Plessy v. Ferguson and Bradwell v. Illinois,
the Court rulings upheld state laws restricting the freedoms and constitutional
protections of certain gender or racial classes (women and minorities).
The Fourteenth Amendment’s due process and equal protection
clauses strengthened federal judicial powers. The Amendment,
originally drafted to protect the newly freed slaves from arbitrary and
capricious state actions, was used to constrain the unfair practices of
businesses. According to some scholars, the Amendment, which
granted Congress the power to enforce its substantive provisions, laid
the foundation for future federal expansion.
Bradwell v. Illinois. The Supreme Court played a pivotal role in
two civil rights cases that tested the privileges and immunities
clause of the Fourteenth Amendment. The Supreme Court, in its
rulings in the Slaughterhouse Cases and Bradwell v. Illinois, noted
that state and national citizenship were separate and distinct. In the
Slaughterhouse Cases the Supreme Court upheld the state of
Louisiana’s right to confer upon one company the right to butcher
cattle in the city of New Orleans, thus creating a monopoly in the
operation of slaughterhouses. In Bradwell v. Illinois the Supreme
Court held that a state could bar women from the practice of law.
The Court’s rulings in these and other cases revived the doctrine of
1887–Interstate Commerce Commission Act.20 The Act further
strengthened Congress’ role in the regulation of commerce among
16 Munn v. Illinois. 94 US 113, 24 Led 77 (1886).
17 Wabash, St. Louis, and Pacific Rail Road v. Illinois. 7 Sct 4, 118 US 557, 30 Led 244
18 Slaughterhouse Cases. 83 US 36, 16 Wall 36, 21 Led 394 (1873) and 77 US 273, 10 Wall
19 Bradwell v. Illinois. 83 US 130, 16 Wall 130, 21 Led 442 (1873).
20 24 Stat. 462.
1890 –Sherman Anti-trust Act.21 The Act allowed Congress to control the
formation of business monopolies and signaled a larger role for the
national government in the economy.
In Plessy v. Ferguson,22 the Supreme Court established the doctrine
of separate but equal, upholding a Louisiana law that mandated
racially segregated accommodation on trains, ruling that so long as the
segregated facilities were equal they were not a violation of the
Fourteenth Amendment’s equal protection clause. The doctrine was
overturned in 1954 in Brown v. The Board of Education of Topeka,
Kansas.23 In Williams v. Mississippi24 the Supreme Court validated
the use of state literacy tests. The Court’s ruling allowed a state to
determine standards under which persons would gain the right to vote.
The application of literacy tests had a discriminatory impact on blacks.
Cooperative Federalism: 1901 to 1960
This period marked an era of greater cooperation and collaboration between the
various levels of government. It was during this era that the national income tax and
the grant-in-aid system were authorized in response to social and economic problems
confronting the nation. Though the first part of the 20th century has been
characterized by some federalism scholars as one of inactivity, by 1920 eleven grant
programs had been created and funded at a cost of $30 million. During this period the
federal government was seen as “servant of the states” in the kinds of activities
funded. The federal grant system, spurred by the Great Depression, was expanded
and fundamentally changed the power relations between federal and state
1910 –New Nationalism. President Theodore Roosevelt’s New
Nationalism initiative sought to expand the powers of the national
government. His view of government contended that matters of
national concern had become too decentralized or as he stated:
“[The New Nationalism] is still more impatient of the
impotence which springs from overdivision of
governmental power, the impotence which makes it
possible for local selfishness or for legal cunning, hired
by wealthy special interests, to bring national activities
21 26 Stat. 209.
22 Plessy v. Ferguson, 18 Sct 1138, 163 US 537, 41 Led 256 (1896).
23 Brown v. Board of Education of Topeka, Kansas. 73 Sct 1, 344 US 1, 97 Led 3 (1954).
24 Williams v. Mississippi. 18 Sct 583, 170 US 213, 42 Led 1012 (1896).
to a deadlock. The New Nationalism regards the
executive power as the steward of the public welfare.”25
1913–New Freedom Program. As an academician, Woodrow Wilson noted
“The question of the relation of the States to the federal
government is the cardinal question of our
constitutional system. At every turn of our national
development, we have been brought face to face with it,
and no definition either of statesmen or of judges has
ever quieted or decided it.”26
As President, Woodrow Wilson built upon the Roosevelt program.
He sought to continue the trend toward more active national
cooperation with other governments. Daniel J. Elazar, a noted scholar
of federalism, contends that Wilson, in line with congressionally-
determined national policies, expanded the federal role beyond27
“servant of the states.
1913–Sixteenth Amendment. The Amendment, which authorized the
income tax, provided the means of developing and expanding the
grant-in-aid system. “If grants-in-aid are the power that drive the
federal engine then the income tax is the fuel that powers it.”28
1938–New Deal. President Franklin D. Roosevelt and the Congress in
response to the economic calamity of the Great Depression further
expanded the federal role in domestic affairs. States were unable to
respond effectively on their own. The expansion of national
government in economic and social policy was seen as a necessary
means of addressing grave national economic conditions. During this
period 16 on-going programs were established. The New Deal era
has been characterized as “the geological fault line” in the history of29
federalism, particularly in the area of federal-local relations.
25 Roosevelt, Theodore, New Nationalism. In The Annals of America. Chicago,
Encyclopedia Britannica, Inc., 1968. p. 253-254.
26 Wilson, Woodrow. Constitutional Government in the United States. New York, Columbia
University Press, 1961. p. 173.
27 Elazar, Daniel J. The Evolving Federal System. In Pious, Richard, ed. The Power to
Govern: Assessing Reform in the United States. Proceedings of the Academy of Political
Science, v. 34, 1981. p. 6.
28 CRS Archived Report 82-139 GOV, Federalism: Key Episodes in the History of the
American Federal System, by Sandra Osbourn, August 16, 1982. p. 33.
29 Ibid., p. 38.
1953–Commission on Intergovernmental Relations.30 Congress created
the Commission on Intergovernmental Relations (CIR), which later
evolved into the Advisory Commission on Intergovernmental
Relations. The CIR was a temporary study commission comprised of
persons appointed by the President and Congress. Its mission was to
review federal aid to state and local governments, to determine if
federal aid and involvement were appropriate, and to assess the fiscal
capacity of the federal government and the states to undertake various
1954–Civil Rights and States’ Rights Reconsidered. Brown v. Board of
Education of Topeka, Kansas struck down, as unconstitutional, an
earlier decision (Plessy v. Ferguson) and the doctrine of “separate but
equal” public accommodations for blacks. The Justices cited the
Fourteenth Amendment’s due process and equal protection clause
noting that racially segregated schools were inherently unequal.
Brown prompted a new wave of action by states intent on resisting the
Court’s decision, including the resurrection of states’ rights under the
doctrine of interposition, which contended that a state government
may interpose itself between an improper national act and the state’s
ACIR was created by Congress to monitor intergovernmental
relations and the operation of American federalism and to report to
Congress, on a continuing basis, recommended improvements. Unlike
its CIR predecessor ACIR is a continuing body comprised of
representatives from federal, state, and local governments.
Creative Federalism: 1960 to 1968
President Lyndon Johnson’s Creative Federalism as embodied in his Great
Society program, was, by most scholars’ assessments, a major departure from the
past. It further shifted the power relationship between governmental levels toward the
national government through the expansion of grant-in-aid system and the increasing
use of regulations.
ruling in Baker v. Carr is a noted example of judicial intervention
into state political affairs on constitutional grounds. The Tennessee
General Assembly had not reapportioned legislative districts since
1901 despite a state constitutional requirement to apportion according
to population. The migration of people from rural to urban areas
30 67 Stat. 145.
31 42 USC 4271
32 Baker v. Carr. 82 Sct 691, 369 US 186, 7 Led2d 663 (1962).
without legislative districts being redrawn to reflect population shifts
had resulted in city residents being under-represented in the state
legislature. The Supreme Court required the reapportionment of
legislative districts based on population (proportional representation).
The Supreme Court ruled that the denial of equal representation
(districts equal in population size) was a violation of the equal
protection clause of the Fourteenth Amendment. Based on standards
established by the Supreme Court, every state except Oregon was
forced to reapportion to achieve districts equal in population.
Another legacy of Baker v. Carr was the reinvigoration of the practice
of gerrymandering of legislative districts after each decennial Census
in order to achieve or maintain some political advantage.
1964–Creative Federalism and the Great Society. Creative Federalism
and the Great Society sought to expand the national government’s
role in an effort to achieve socially desirable outcomes (i.e reductions
in poverty, elimination of hunger). Prior to the Johnson
Administration, federal involvement often had to be justified as a
necessary evil in order to legitimize intrusion into state and local
affairs. Under the new theory, federal involvement was justified as
long as Congress could establish a national purpose for such actions.
The Great Society programs used states and local governments as
intermediaries or agents to implement national policies, and the
volume of federal regulations increased as the federal government
became increasingly involved in areas that had previously been the
purview of state and local governments or the private sector.
Contemporary Federalism: 1970 to 2000
This period has been characterized by shifts in the intergovernmental grant
system, the growth of unfunded federal mandates, concerns about federal regulations,
and continuing disputes over the nature of the federal system.
1970s–New Federalism: Phase I. During the 1960s concerns were raised
about the intergovernmental grant system, particularly about
duplication, fragmentation, overlap, and confusion. These concerns
resulted in attempts by the Richard Nixon and Gerald Ford
Administrations to redirect power relations within the federal system.
The Administrations’ principal tools were revenue sharing and the
consolidation of federal aid programs into six special revenue sharing
programs. The intent was to shift funds, authority, and responsibility
to states and local governments in an effort to more effectively
manage the intergovernmental grant system. Though not completely
successful, the Nixon era did recast the debate on the roles of various
levels of governments.
1976–Commerce Clause, Enumerated Powers, and State and Local
Governments. National League of Cities v. Usury33 addressed the
conflict between the Tenth Amendment’s enumerated powers clause,
which limited the federal government’s power to those specified in the
Constitution and the commerce clause of Article I, which bestowed
upon the national government the power to regulate commerce. In
ruling on the constitutionality of the Fair Labor Standards Act,34
which established minimum wage and maximum working hours for
private and public sector employees, the Supreme Court addressed
one of the fundamental issues in federalism: to what extent may the
Congress impose upon the sovereignty of the states. The Supreme
Court ruled that the Fair Labor Standards Act’s 1974 amendments,
which extended hour and wage coverage to state and local public
employees, violated state sovereignty as protected under the Tenth
1980s–New Federalism: Phase II. Initiatives of the Ronald Reagan
Administration stimulated the debate on the appropriate roles of
federal, state, and local government. President Ronald Reagan, rather
than attempt to more rationally manage federal aid as was the case in
the Nixon Administration, sought to fundamentally restructure the
system of governance. In his 1981 inaugural address, President
Reagan raised an issue as old as the Republic: what is the nature of
the union? The President stated that “the federal government did not
create the states, the states created the federal government.”35 This
statement expressed the sentiments found in the Virginia and
Kentucky Resolutions, the Webster/Hayne debate, the doctrine of
nullification and state sovereignty and the states’ rights philosophy.
The modern debate has also been fueled by dissatisfaction with the
effectiveness and efficiency of the national government. In 1981
Congress passed the Omnibus Budget Reconciliation Act that
consolidated a number of social programs into nine block grants,
which allowed for greater state and local autonomy and flexibility in
the fashioning of local strategies to address federal objectives. The
Administration was not successful in the second phase of New
Federalism, which would have reallocated federal and state
responsibility and resources for welfare, food stamps, and Medicare
and would have turned back revenue sources to the states. The
George Bush Administration also offered a turn back proposal.
33 National League of Cities v. Usury. 96 Sct 2465, 426 US 833, 49 Led2d 245 (1976).
34 29 USC 201.
35 General Services Administration. National Archives and Records Service. Office of the
Federal Register. Public Papers of the Presidents — Ronald Reagan 1981. Inaugural
Address January 20, 1981. Washington, U.S. Govt. Print. Off., 1982. p 2.
1985–National League of Cities v. Usury Reconsidered In Garcia v. San
Antonio Metropolitan Transit Authority36 the Supreme Court revisited
the issue of state sovereignty and state and local government
protection from the imposition of federal actions. Garcia v. San
Antonio reversed National League of Cities v. Usury. Garcia has had
two significant impacts on federalism, according to some scholars.
One, under Garcia the Supreme Court held that the Tenth
Amendment does not protect state and local governments from
compliance with the Fair Labor Standards Act, which is counter to the
concept of dual federalism. Two, the Court seemed to be backing
away from its role as final arbiter or interpreter of the Constitution in
disputes between political branches of the federal government and the
states. The Court appeared to be allowing such disputes to be
resolved by the “political”—that is the legislative—branch of
1995–New Federalism: Phase III. The Bill Clinton Administration’s
Reinventing Government Initiative and the House Republicans’
Contract with America are efforts to rearrange the power
relationships in the federal system. Both efforts seek to devolve
greater authority to lower levels of government. However, the initial
reinvention effort, as embodied in its National Performance Review
Creating A Government that Works Better and Costs Less,37
concentrated on achieving management efficiencies at the federal
level. Practical outcomes have included the issuance of E.O. 12866,38
which encourages regulatory reform such as coordinating and
consolidating planning and review requirement among complementary
federal programs. The Contract with America,39 is a document signed
by Republicans campaigning for House seats during the 1994 election
season. It includes drafts of the House Republicans’ ten legislative
priorities for the first 100 days of the 104th Congress, several of
which focused on changing the power relationships between the
national and state governments. Presently, it has refocused debate on
the role of government and what level of government is best suited to
carry out certain functions. The present federalism debate has
resulted in the passage of unfunded federal mandate legislation, which
requires the federal government to assess the cost/benefit impact of
36 Garcia v. San Antonio Metropolitan Transit Authority. 105 Sct 1005, 83 Led2d 1016
37 Report of the National Performance Review. From Red Tape to Results, Creating a
Government that Works Better and Costs Less. Vice President Al Gore. Washington,
September 7, 1993. U.S. Govt. Print. Off., 1993.
38 U.S. President, 1992- (Clinton). Executive Order 12866, Regulatory Planning and Review.
Federal Register, v. 58, October 4, 1993. p. 51734.
39 Gingrich, Newt, Dick Armey, and the House Republicans. Contract with America.
Gillespie, Ed and Bob Schellhas, eds. New York, Times Books, 1994. p. 196.
federal legislation on states, local governments, and the private sector;
has fueled discussions concerning the possible elimination of several
federal departments; has prompted action to reform the regulatory
process; and has caused the consideration of legislation that would
eliminate, downsize, consolidate, or block grant a number of federal
programs in an effort to foster greater flexibility and control by state
governments. This debate has been driven by fiscal and philosophical
factors including the desire to reduce the federal deficit, to achieve
management efficiencies at the federal level, and to reconsider the
proper roles of federal, state, and local governments.
1997–The 104th Congress convened with the historic installation of a
Republican majority in both houses of Congress. Taking control of
the House of Representatives after 40 years in the minority, the new
Republican majority moved quickly to fulfill its Contract with
America. Among the accomplishments of the 104th Congress was the
passage of the Unfunded Federal Mandate Reform Act of 1995, P.L.
104-4, which requires the federal government to assess the
cost/benefit impact of federal legislation and regulations on states,
local governments, and the private sector. The Congress also
considered but failed to win passage of a balance budget amendment
that if approved by the states would have significantly affected the
intergovernmental grant system and the relationships between the
national government and states and localities.
The second session of the 104th Congress brought a renewed
push on several federalism/intergovernmental relations issues.
Congress passed legislation restructuring the delivery of rural
development services, creating new block grants in the areas of law
enforcement, rural development, and welfare. Other block granting
proposals consolidating job training, education, food stamps, and
medicaid failed to win final congressional approval. The Congress
also passed a sweeping telecommunications act including provisions
reaffirming the authority of state and local governments to regulate
and manage public rights-of-way, requiring reasonable compensation
for the use of public rights-of-way, and prohibiting the preemption of
local zoning authority in the siting of cellular towers. In addition, the
Act preempts local, but not state, taxation of direct satellite broadcast
services. For his part, President Clinton vetoed product liability
legislation that would have preempted state tort laws governing the
awarding of damages in civil cases.
–State’s Rights and Responsibilities Revived. In 1985, in Garcia
v. San Antonio Metropolitan Transit Authority, the Supreme Court
declared that states must find redress from congressional regulation
through the political/legislative process and not the judiciary. In more
recent cases, however, the Court has provided ample evidence that the
era of judicial restraint may be over in matters of federalism and the
power relationships between the federal government and the states.
Starting with New York v. United States40 and including United States
v. Lopez41 and Seminole Tribe of Florida v. Florida,42 the Supreme
Court has taken a more activist role, limiting the power of the federal
government and narrowing the Court’s interpretation of the commerce
clause in favor of state rights.
In 1992, in New York v. United States, the Supreme Court
declared unconstitutional provisions of the Low Level Radioactive
Waste Policy Amendments Act of 1985.43 The Act required states to
establish sites for the disposal of non-federal radioactive waste
generated by businesses within their borders. States failing to
establish such disposal sites were to be legally liable for damages
incurred by businesses such as hospitals, nuclear utility companies,
and medical research labs that generate low-level radioactive material.
In a victory for states’ rights advocates, the Supreme Court ruled that
under the Tenth Amendment, the federal government could not
compel states to enact or administer a federal regulatory program.
In a second victory for states, the Supreme Court, in 1995, in
United States v. Lopez, in a 5-4 decision, narrowed the interpretation
of the commerce clause when declaring the Drug Free School Zone
Act of 199044 unconstitutional. The Act made it a federal crime to
possess a gun within 1,000 feet of a school. The Court ruled that the
Act could not be justified under the commerce clause of the
Constitution. The Court’s narrow decision was seen as a victory for
states’ rights advocates who asserted that the Act intruded on the law
enforcement responsibilities of states.
In a third decision, Seminole Tribe of Florida v. Florida,
affirming the sovereignty of states, the Supreme Court ruled that the
Indian Gaming Regulatory Act of 198845 allowed Indian tribes to
undertake certain gambling activities on Indian lands only after
entering into a compact with the state in which the gaming activity is
to be located. The Act gave Indian tribes the right to sue states in
federal court to compel good faith negotiations in establishing the
compact. The Supreme Court ruled the provision allowing Indian
tribes to sue states in federal court unconstitutional because it violated
the Constitution’s Eleventh Amendment restriction prohibiting any
person from suing a state in federal court, without the state’s
40 New York v. United States. 488 U.S. 1041 (1992).
41 United States v. Lopez. 115 Sct 1624, 131 Led2d 626 (1995).
42 Seminole Tribe of Florida v. Florida. 116 Sct 1114, 134 Led2d 252 (1996).
43 99 Stat. 1842.
44 18 USC 922.
45 102 Stat. 2475.
–U.S. Term Limits, Inc. v. Thornton, Congressional Term and the
Concept of Dual Citizenship. In a defeat for states’ rights
advocates, the Supreme Court, in a 5-4 decision, declared term limit
legislation enacted by several states unconstitutional. Proponents of
term limit legislation argued that the Constitution (Article 1, Section
4) allowed each state to fix the time, place, and manner of elections
for Senators and Representatives of Congress. The Supreme Court
ruling reaffirmed the concept of dual citizenship enunciated in 1873 in
the Slaughterhouse Cases and Bradwell v. Illinois. The Court ruled
that a state could not add to the qualifications for federal office as
enunciated in Article l of the Constitution. Further, Justice Kennedy,
in a concurring opinion, noted that term limits violate the
“fundamental principles of federalism.” He argued that there exists a
federal right of citizenship, a relationship between the people ... and
their National Government, with which the states may not interfere.”
–Advisory Commission on Intergovernmental Relations Abolished.
Federal financial support for the independent federal agency, which
began its work in 1959, terminated in 1996.
2000–During these years, the trend toward devolution continued to
dominate the debate over the character of American federalism, as
Republican majorities in Congress pursued their program. Continued
Republican control of Congress had facilitated the change toward
greater state authority. Examples may be found in legislation,
executive orders, and Supreme Court cases.
–Legislative Preemption. Legislatively, few proposals that affect
federalism were enacted during this three year period. The most
noteworthy among these proposals dealt with issues involving federal
preemption of state taxing authority and federal grant management.
In 1998, Congress passed the Internet Tax Freedom Act, P.L. 105-
277, which was included in Omnibus Consolidated Supplemental
Appropriations Act of 1999. The Act placed a three-year moratorium
on taxing of Internet commerce and access. The House sought to
extend this moratorium to five years when it passed H.R. 3709, the
Internet Nondiscrimination Act of 2000, but the bill was not acted
upon by the Senate. The legislation would have preempted states that
sought to tax revenue generated from such economic activity. Several
groups representing state and local officials, and led by the National
Conference of State Legislators, opposed the moratorium and,
instead, called for a voluntary multi-state system to collect and
administer existing sales and use taxes for internet commerce. The
congressional preemption removed that proposal as a possible option
for the states.
In 1999, Congress also considered and passed the Financial Services
Modernization Act, P.L. 106-102. The Act preempts some state laws
regarding licensing insurance agents and state authority over the legal
status of mutual insurance companies.
–Continued Devolution. Also in 1998, Congress passed the
Workforce Investment Act, P.L. 105-220, replacing the Job Training
Partnership Act as the primary source of federal support for
employment training programs. The Act was designed to consolidate,
coordinate, and improve employment, training, literacy, and
vocational rehabilitation programs in the United States. It is
characterized by many as a block grant, a cornerstone of
–Also in 1999, Congress approved the Federal Financial Assistance
Management Act, P.L. 106-107. The Act directs each federal agency
to streamline and simplify application, administration, and reporting
requirements of federal grants and other assistance. It also directs the
Office of Management and Budget to develop uniform rules for
crosscutting requirements relating to civil rights, environmental policy,
and labor standards.
–Executive orders. Executive Orders also addressed federalism issues
during this period. Executive Order 13132, issued by President
Clinton on August 10, 1999, delineated “the division of governmental
responsibilities between the national government and the states.”46 In
that regard, the order sought to strike a balance between the rights
and responsibilities of the states with the authority of the national
government.47 The order also sought “to ensure that the principles of
federalism established by the Framers guide the executive departments
and agencies in the formulation and implementation of policies.”48
The order built upon provisions in two revoked orders – E.O. 12612,
issued by President Reagan on October 30, 1987; and E.O. 12875,
issued by President Clinton on October 28, 1993. Indeed, E.O. 12132
retained much of the language of the revoked orders. The major
difference is that it required federal agencies to establish an ongoing
consultation process involving state and local officials in discussions
prior to the release of proposed regulations or legislation.
The order succeeded E.O. 13083, which was criticized on a number
of grounds, notably that it lacked sufficient input from state and local
governments, and emphasized the supremacy of the national
government. The criticism and controversy pitted state and local
officials, and their advocates in Congress, against the President.
Further, opponents of the order expressed concern that the criteria the
Administration set for federal involvement in domestic issues would
46 U.S. President (Clinton), “Federalism,” Executive Order 13132, Federal Register, vol. 64,
Aug. 10, 1999, p. 43255.
47 For a detailed discussion of the differences between executive orders 13132, 12875, and
open the door to increased federal intervention into what some
analysts considered areas of state sovereignty. The order was
suspended49 in the wake of the criticism, and after a congressional
hearing on the order in which some witnesses emphasized the
sovereignty of states on certain issues.50 Contributing to the
suspension of the order was legislation prohibiting the expenditure of
funds for its implementation,51 and the introduction of a measure to52
enact alternative policy.
–Judicial Strengthening of States’ Rights. The Supreme Court
emerged as a major arbiter for determining the character and direction
of contemporary American federalism. The Court’s emergence in this
regard was due, primarily, to its interpretations of the interstate
commerce clause and the Tenth and Eleventh Amendments. While all
of the cases handled by the Court did not favor states’ rights, the trend
was one of siding with the states and against the federal government,
thereby limiting congressional and presidential power. Noteworthy
among these Court decisions were Printz v. United States,53 Alden v.5455
Maine, and Kimel v. Florida Board of Regents.
Printz v.United States (1997) concerned a challenge to a provision of
the Brady Handgun Violence Prevention Act of 1993 that required the
Attorney General to establish a national system for instantly checking
prospective handgun purchasers’ backgrounds. The provision further
commanded the “chief law enforcement officer” (CLEO) of each local
jurisdiction to conduct such checks and perform related tasks on an
interim basis until the national system became operative. CLEOs for
counties in Montana and Arizona filed suit against the provision,
arguing that it was an unconstitutional violation of state sovereignty.
The Supreme Court ruled on June 27, 1997, that the Brady Act
provision was an unconstitutional encroachment on states’ powers.
49 U.S. President (Clinton), “Suspension of Executive Order 13083,” Federal Register, v. 63,
Aug. 7, 1998, p. 52565.
50 U.S. Congress, Subcommittee on National Economic Growth, Natural Resources, and
Regulatory Affairs, Committee on Government Reform and Oversight, Clinton-Gore v. Statethnd
and Local Governments, hearing, 105 Cong., 2 sess., July 28, 1998 (Washington, D.C.:
GPO, 1998), p. 332.
51 Congress inserted an amendment into the HUD/VA appropriations for FY 1999 (P.L. 105-
daily edition, vol. 144, July 29, 1998, p. H6571-H6573.
52 Refer to H.R. 4422, S. 2445, 105th Congress.
53 521 U.S. 98 (1997).
54 119 S. Ct. 2240 (1999).
55 120 S. Ct. 631 (2000).
In Alden v. Maine (1999) the Supreme Court ruled that, as with
federal courts, state sovereignty immunized states from suits brought
in state court. Consequently, state employees could no longer sue to
enforce the Fair Labor Standards Act against state governments. In
Kimel v. Florida Board of Regents (2000), the Court ruled that
Congress lacked authority to make the states, as employers, liable to
suit under the federal Age Discrimination in Employment Act of 1967.
–Limited Federal Supremacy. While the Supreme Court moved
toward reducing federal authority over the states, there were some
rulings that maintained the supremacy of federal law. Among the
noteworthy cases in this regard were Reno v. Condon,56 Crosby v.5758
National Foreign Trade Council, and United States v. Locke.
–In Reno v. Condon (2000), the Supreme Court unanimously rejected
a states’ rights challenge to the Drivers Privacy Protection Act, a
federal law that bars states from selling personal information about
licensed drivers and automobile owners. In Crosby v. National
Foreign Trade Council, the Supreme Court held that a federal law
placing sanctions on the nation of Myanmar, formerly Burma, pre-
empted a Massachusetts law that withheld state business from
companies that do business with that nation’s military regime. In
United States v. Locke, the Supreme Court cited the longstanding
federal interest in uniform rules for interstate navigation to invalidate
the State of Washington safety and environmental regulations for
tanker traffic along its coast. The Court ruled unanimously that
federal laws covering tankers take precedence over state regulations.
56 120 S. Ct. 666 (2000).
57 2000 U.S. Lexis 4153
58 530 U.S. 363.
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of Political and Social Science, John Kincaid ed., Newbury Park, Sage
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