4.5: Federalism Today

Modern American federalism continues to be cooperative rather than dual. States still play an important role in governing themselves, but increasingly they operate with direction and assistance from the national government on matters which they were previously expected to handle on their own. Today, many national-level organizations — among them the Department of Education, the Environmental Protection Agency, and the Federal Emergency Management Agency, — administer policies and programs that Americans in prior centuries never expected would fall under the purview of the national government.

Much of this national-state cooperation involves grants of money authorized by Congress and distributed to the states for them to spend. These grants can be either categorical or block. A categorical grant is an amount of money issued to a state by Congress to spend for some specific purpose according to specific guidelines. A block grant is similar to a categorical grant but comes with fewer strings attached, giving the state more leeway to decide how to spend it. Categorical and block grants fall in and out of fashion over time in Washington: categorical grants tend to be more popular when Congress is controlled by the Democratic Party (which generally favors national-level policymaking), whereas block grants tend to be more popular when the Republican Party (which generally favors state-level policymaking) is in power.

Sometimes the national government uses grants to indirectly influence states to adopt certain policies. For example, in 1984, Congress wanted states to raise their drinking ages to 21, but a national mandate could have prompted a protracted legal battle with the states and might have been ruled unconstitutional.

Instead of forcing states to change their alcohol consumption laws, Congress passed a law that would withhold 10% of a state’s highway funding if it did not raise its drinking age to 21. Within 11 years, all 50 states and the District of Columbia had brought their laws in line with the new national standard rather than suffer the loss of funding.

The mere fact that the term cooperative federalism contains the word cooperative does not mean that the national and state governments always cooperate. Federalism, like many aspects of American government, is laid out in the Constitution vaguely enough to obscure what precisely the Founders intended. States regularly spar with the national government over competing interpretations of constitutional or statutory law that would afford one or the other more power, often resulting in the Supreme Court deciding which interpretation is correct.

One perennial battleground in the fight over American federalism is immigration. In 2010, Arizona passed a law to allow its state police officers to check the legal status of suspected illegal immigrants. President Barack Obama’s administration objected that immigration control was the domain of the national government; Arizona countered that the national government’s unwillingness to secure the border compelled the state to take matters into its own hands. (Some parts of Arizona’s law were eventually struck down by the U.S. Supreme Court in Arizona v. United States in 2012.) When Obama was succeeded by President Donald Trump — who had made border security a centerpiece of his presidential campaign — California and other states made a point of limiting their cooperation with U.S. Immigration and Customs Enforcement (ICE) efforts to identify and deport illegal immigrants. Under President Joe Biden, national immigration policies were again relaxed. Frustrated, Texas Governor Greg Abbott began sending buses of illegal immigrants to Washington, D.C., to draw attention to what he considered to be a dereliction of duty on the part of the president.

Perhaps the most paradoxical federalism-related dispute concerns drug laws. Since the passage of the Controlled Substances Act in 1970, marijuana has been classified as a Schedule I drug, alongside much harder drugs such as ecstasy, heroin, and LSD. This classification effectively makes marijuana not just an illegal drug but one of the most illegal drugs in the United States. Despite this, 38 states have passed laws legalizing marijuana for medical or recreational use since 1996, in defiance of national law. (See Figure 4.2 below for a map of marijuana laws by states.) The supremacy clause clearly indicates that the Controlled Substances Act supersedes these state laws, but the national government has largely refrained from prosecuting marijuana users and dealers, except in the context of gang-related matters or major trafficking operations. Attempts by some members of Congress to “reschedule” marijuana to a less restricted category have thus far failed, leaving this contradiction in national and state policies unaddressed for the time being.

Figure 4.2: Legal status of marijuana according to state laws, 2023 (Source: Business Insider)

Many of the most contentious issues in American politics today are fundamentally about federalism. As the national government has become more involved in policy areas previously handled by states, new debates have arisen about the proper way to divide power between the two levels. These debates involve both constitutional interpretation of the Founders’ intent as well as practical considerations about whether national or state government is better equipped to deal with the issues in question.