Our faltering federalism
How long can the system keep up with the demands of the 21st century?
There wasn’t much President Joe Biden could have done about this month’s Texas energy disaster. Ditto the slow-moving vaccine rollout. The reason is the same: federalism, a system dating to the 1780s and only seriously overhauled once.
Although federalism still has some benefits, its obsolescence is increasingly obvious when the U.S. faces crises that, like climate change and COVID-19, don’t respect state boundaries. Energy and health care are only two of the crucial infrastructure systems that remain state-regulated or state-run. And many of those systems are in need of updating everywhere — not piecemeal, as federalism tends to support.
Federalism was, in important ways, an American invention, the brainchild of James Madison. It was a product of political necessity for 13 states that had been separately administered as British colonies and that had already tried and failed to function as a loose confederation between 1776 and 1787.
‘Split the atom of sovereignty’
Unifying into a single nation would have been practical for the early United States. At the Philadelphia constitutional convention, big-state representatives, including Madison, favored a heavily national model of government to replace the failing decentralized system created by the Articles of Confederation.
But local elites in the small states did not want to give up power. They staged a walkout, returning only once they were assured of permanent protections for their states, including equal representation in the Senate.
The core idea of federalism was that states would retain sovereignty over their citizens, while the federal government would in parallel exercise its own sovereignty over the same people. The founders thus “split the atom of sovereignty,” as Justice Anthony Kennedy once grandly put it: Instead of a single sovereign government, the U.S. would have a federal semi-sovereign government operating alongside the semi-sovereign states.
The devil was in the details.
Which government controlled which powers became a challenge. The Civil War was fought in part over the question of whether states or the federal government would have control over the existence of slavery.
Recognizably modern national regulatory legislation began to emerge gradually in the Progressive Era. In 1887, a century after the Philadelphia convention, the Interstate Commerce Commission was created by Congress to regulate railroads, the most important interstate infrastructure of the day.
Continuing the compromise
But it took the Great Depression and the resultant New Deal for Congress to pass vast national legislation and to create a raft of federal agencies to perform coordinating tasks that had previously been unthinkable.
New Deal federalism was itself continuing the compromise between the federal government and the states. Core issues of national competency were moved to the federal level. Yet states retained a tremendous amount of regulatory capacity, including in areas that overlapped with federal regulatory control.
Thus, to take the example of energy, both the federal government and the states regulate different aspects of the power grid. In this respect, today’s federalism isn’t radically different from the federalism of the New Deal. Texas actually made a conscious choice not to connect its power grid to that of other states, partly to retain state regulatory control.
Under the Constitution, as it has been interpreted since the New Deal, Congress would have the power to pass laws that impose regulatory controls even on in-state power grids. If Congress wanted to, it could enact laws empowering federal regulators to require state-based power plants to be capable of functioning even in very cold temperatures, thereby reducing the risk of the kind of temperature-based breakdowns that caused the recent Texas power disaster.
Similarly, Congress has the authority to do much more than it does to control or regulate health care at the state level. Even a nationalized health care system would be within the constitutional reach of Congress.
Customs and norms
Education is yet another area where states exercise near total authority, even though the issue is of obvious national importance.
The problem, therefore, doesn’t lie in the Constitution, at least not primarily. It lies in the deeply established political norms and customs that still confer enormous power on states, even regarding national infrastructure problems that span state boundaries.
Those customs and norms continue to shape the distribution of power and responsibility as between the states and the federal government. True, the constitutional design of the Senate, as well as the continued sovereign existence of the states, help shape the ongoing political reality. But as the New Deal federalism overhaul shows, those structural features of our federal system can be overcome when crisis demands it.
Will the crises regarding climate change and COVID-19 generate support for overhauling federalism again? If failures continue to pile up over time, the public will demand change. To meet that need, Congress and the president may see fit to regulate more extensively. As infrastructure in the United States continues to degrade, the need for such federal initiatives is likely to grow.
Until it does, the U.S. will remain stuck with the legacy of an 18th-century Constitution that, despite its many virtues, doesn’t always meet the needs of the moment.