POLSC232: American Government

1976 – Commerce Clause, Enumerated Powers, and State and Local Governments.

National League of Cities v. Usury 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, 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 Amendment.

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". 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.

1985 – National League of Cities v. Usury Reconsidered

In Garcia v. San Antonio Metropolitan Transit Authority 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 government.

1992 to 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, concentrated on achieving management efficiencies at the federal level. Practical outcomes have included the issuance of E.O. 12866, which encourages regulatory reform such as coordinating and consolidating planning and review requirement among complementary federal programs. The Contract with America, 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 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.

1995 to 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 States and including United States v. Lopez and Seminole Tribe of Florida v. Florida, 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. 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 1990 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 permission.

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.

1997 to 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.