an unanticipated consequence of
Jack M. Balkin
Jack Balkin: jackbalkin at yahoo.com
Bruce Ackerman bruce.ackerman at yale.edu
Ian Ayres ian.ayres at yale.edu
Mary Dudziak mary.l.dudziak at emory.edu
Joey Fishkin joey.fishkin at gmail.com
Heather Gerken heather.gerken at yale.edu
Abbe Gluck abbe.gluck at yale.edu
Mark Graber mgraber at law.umaryland.edu
Stephen Griffin sgriffin at tulane.edu
Bernard Harcourt harcourt at uchicago.edu
Scott Horton shorto at law.columbia.edu
Andrew Koppelman akoppelman at law.northwestern.edu
Marty Lederman msl46 at law.georgetown.edu
Sanford Levinson slevinson at law.utexas.edu
David Luban david.luban at gmail.com
Gerard Magliocca gmaglioc at iupui.edu
Jason Mazzone mazzonej at illinois.edu
Linda McClain lmcclain at bu.edu
John Mikhail mikhail at law.georgetown.edu
Frank Pasquale pasquale.frank at gmail.com
Nate Persily npersily at gmail.com
Michael Stokes Paulsen michaelstokespaulsen at gmail.com
Deborah Pearlstein dpearlst at princeton.edu
Rick Pildes rick.pildes at nyu.edu
Richard Primus raprimus at umich.edu
K. Sabeel Rahmansabeel.rahman at brooklaw.edu
Alice Ristroph alice.ristroph at shu.edu
Neil Siegel siegel at law.duke.edu
Brian Tamanaha btamanaha at wulaw.wustl.edu
Mark Tushnet mtushnet at law.harvard.edu
Adam Winkler winkler at ucla.edu
American federalism faces both great promise and serious dangers over the next few years. One of the most important advantages of federalism is the ability to “vote with your feet” – to leave a state with oppressive or ineffective policies and move to a better one. Modern technology has greatly reduced the moving costs that previously made interstate migration difficult. Information about different jurisdictions is easier to get than ever before. Increasing mobility and declining information costs give state and local governments stronger incentives to adopt policies that will be attractive to migrants. Revenue-hungry state governments know that valuable taxpayers will depart if they raise taxes too high or provide poor public services.
Some claim that federalism has lost its value because most Americans no longer feel any strong attachment to state governments. Yet this change may actually make federalism more effective. People who do not feel an attachment to their states are more willing to vote with their feet. This strengthens the incentive of state and local governments to adopt policies appealing enough to keep migrants from leaving. In an increasingly complex and diverse society, federalism is also potentially more valuable than ever in its traditional role of providing divergent policies for people with differing preferences.
Unfortunately, American federalism is imperiled by the ongoing growth of federal power, especially the increasing dependence of state governments on federal funds. Our system has been successful in part because state governments have historically been forced to raise most of their revenue themselves. State governments that raise their own funds have strong incentives to adopt policies that promote economic growth and attract potential migrants. A state that falls behind its rivals is likely to lose its tax base. But states that can rely on federal funding to meet their fiscal needs face much less competitive pressure and are therefore less likely to adopt good policies. Moreover, federal grants to state governments enable Washington to reduce policy diversity between states, since Congress routinely attaches conditions to its grants that mandate uniformity.
The explosion of federal spending since the financial crisis of 2008 has made states more dependent on federal funding than ever before. In 2009, federal grants-in-aid constitute some 25% of total state revenue, up from less than 20% in 2007. For the first time, federal grant money has become the single largest source of state revenue. The Obama Administration expects federal funding for states to remain at this abnormally high level for years to come. Even when the recession ends, it will be politically difficult to cut federal grants back to previous levels. If Congress passes a major health care bill, federal grants to states will increase still further.
Federalism has also been weakened by the expansion of Congressional regulatory authority. The federal government has come to regulate almost every aspect of American society. This trend accelerated under the Bush Administration, which pushed through legislation expanding federal control of education and health care, and supported federal preemption of a variety of state laws, including ones permitting assisted suicide and the use of medical marijuana. The more policy areas come under federal control, the less the scope for interjurisdictional competition at the state and local level.
Unfortunately, state governments are often complicit in the overexpansion of federal power. States routinely lobby for increased federal funding. For their part, most voters have little understanding of federalism issues. As a result of such public ignorance, overextension of federal authority is rarely punished at the polls.
There is no easy way to limit or roll back the growth of federal power. Increasing public understanding of the problem is a necessary but difficult first step. The courts can also help by enforcing constitutional limits on federal authority. Nonlawyers rightly react with disbelief when they learn that Supreme Court has interpreted Congress’ power to regulate “Commerce . . . among the several States” expansively enough to uphold a ban on the possession of medical marijuana that was never sold in any market or left the state where it was grown. The Court has similarly erred in interpreting Congress’ power to spend for “the General Welfare” so broadly as to legitimize expenditures for local porkbarrel projects such as the “Bridge to Nowhere” that blatantly benefit parochial local interest groups at the expense of nation as a whole. Courts obviously cannot rein in federal power all by themselves. But they can provide a useful corrective.
The 21st century could be an extraordinarily successful time for American federalism - but only if we restrain the growth of federal power.