4.5: Evolving Federalism

The ratification of the Constitution in 1788 began the process of adjusting the United States from a confederal system to a federal one. From the outset, the Supreme Court was frequently called upon to interpret the Constitution in situations where its meaning was unclear. Several of the Court’s earliest decisions pertaining to federalism reinforced the preeminence of the national government. These decisions included McCulloch v. Maryland in 1819 (which established that states could not impose taxes on the national bank) and Gibbons v. Ogden in 1824 (which struck down a steamboat monopoly on the Hudson River that inhibited the national government’s ability to regulate interstate commerce).

Although these early decisions solidified the supremacy of the national government, the Supreme Court generally abided by a philosophy of dual federalism. This approach sharply divided the domains in which national and state governments could exercise their powers and gave states wide latitude to manage their own affairs without national interference.

One rationale for dual federalism had to do with slavery, an issue on which the Founders had struck a tenuous bargain in order to ratify the Constitution. In theory, letting states set their own policies on slavery would preserve the fragile harmony between free states and slave states. In practice, this proved impossible. The Fugitive Slave Act of 1850 forced free states to return escaped slaves to their owners if captured, and the Supreme Court’s 1857 ruling in Dred Scott v. Sandford affirmed that slaveowners could bring their slaves with them to free states while still maintaining ownership. Free states bristled at the fact that national law forced them to be complicit in an abhorrent act which they had made illegal but which some of their neighbors had not.

The unworkable patchwork of laws pertaining to slavery was eventually torn apart and stitched back together by the Civil War. In the half-century that followed, five constitutional amendments shifted power away from the states. The Thirteenth Amendment abolished slavery nationwide. The Fourteenth Amendment guaranteed equal protection of the law for citizens in all states. The Fifteenth Amendment extended the right to vote to citizens of all races. The Sixteenth Amendment granted Congress the authority to impose a national income tax. Finally, the Seventeenth Amendment removed the power to elect senators from the state legislatures and gave it to the citizens instead.

America’s federal balance tilted further toward the national level and away from the state level in the 1930s. The Great Depression brought severe hardships, prompting the national government to take unprecedented actions to rebuild the economy. President Franklin D. Roosevelt’s New Deal expanded the national government in both size and scope, enabling it to tackle challenges of reducing unemployment, building infrastructure, regulating the financial system, and providing pensions in the form of Social Security. Some initiatives were blocked by the Supreme Court as unconstitutional power grabs, but ultimately the Court allowed most of the New Deal to go into effect.

The 1960s brought further expansion of the national government’s role. President Lyndon B. Johnson’s Great Society programs led to the creation of Medicare (to lower healthcare costs for the elderly) and Medicaid (to do the same for the poor), as well as other policies aimed at eradicating poverty, promoting education, and ending racial discrimination. By this point, the United States had moved from dual federalism to cooperative federalism, with national and state governments working to solve problems in tandem, rather than independently.