4.6: Federalism Today

Modern American federalism continues to be cooperative rather than dual. States still largely govern themselves, but they increasingly operate with direction and assistance from the national government on matters they used to handle on their own. Today, many national-level organizations (including the Department of Education, the Environmental Protection Agency, and the Federal Emergency Management Agency) administer policies 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 comes with fewer strings attached, giving the state more freedom to decide how to spend it. Categorical grants tend to be more common, relative to block grants, when the Democratic Party controls Congress. When the Republican Party controls Congress, the opposite is true. These tendencies reflect the major parties’ governing philosophies. Democrats generally favor national-level policymaking and thus provide more guidance for how grants should be spent, whereas Republicans tend to favor state-level policymaking and thus prefer less restrictive grants.

Sometimes the national government uses grants to indirectly influence state policy. In the 1980s, Congress wanted states to raise their drinking ages to 21, but a national mandate could have prompted a protracted court battle and might have been ruled unconstitutional.

Instead of forcing states to change their alcohol consumption laws, Congress tightened its purse strings. The National Minimum Drinking Age Act of 1984 threatened to withhold 10% of a state’s highway funding if it did not raise its drinking age to 21. Within 12 years, all 50 states and the District of Columbia had conformed to 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. 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 leading the Supreme Court to step in and decide which interpretation is correct.

One perennial battleground in the fight over American federalism is immigration. In 2010, Arizona passed a law allowing its state police officers to check the legal status of suspected illegal immigrants. President Barack Obama’s administration objected that immigration 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 not cooperating with national efforts to identify and deport illegal immigrants. Under Trump’s successor, Joe Biden,, national immigration policies were again relaxed. Displeased, Texas began sending buses of illegal immigrants to Washington, D.C., to draw attention to what it considered a dereliction of duty on the part of the president.

Perhaps the most paradoxical federalism dispute concerns drug laws. The Controlled Substances Act of 1970 classifies marijuana as a Schedule I drug, alongside much harder drugs such as ecstasy, heroin, and LSD. This classification makes marijuana not just illegal 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 policy. (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. Nonetheless, the national government has largely refrained from prosecuting marijuana users and dealers, except when gangs or major trafficking operations are involved. 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.

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 how power should be divided 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.

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