Federalism Needs a Revival

The Federalist Papers figured prominently in the ratification of the Constitution, with its notable authors (James Madison and Alexander Hamilton, for the most part) making well-reasoned arguments and good-faith promises to the people about the principles of federalism.

But mention “federalism” in your popular circles today and it comes across as modern as powdered wigs.

Indeed, just as the youngsters of today can’t imagine life without cell phones and the Internet, the next generation of Americans may well be incapable of understanding federalism as conceived by our Founders. Even today, the citizenry at large yawns when federalism is openly assaulted, and sometimes cluelessly cheers the onslaught on.

In 2005, for example, only one state—Louisiana—depended on federal revenue for more than 40 percent of its state budget. As of last year, 11 other states were more than 40 percent dependent, and another 16 states relied on Washington as their primary revenue source.

On the D.C.-dependency scale, Arkansas settles pretty much in the middle, at number 24, with 35 percent of our revenue derived from the federal wellspring.

State entanglement with Washington has been no accident. The number of federal aid-to-state programs has more than tripled in the last quarter-century, from 335 in 1985 to 1,122 in 2010.

A study from the Mercatus Center at George Mason University confirmed the “flypaper effect”-a term used by economists referring to the idea that federal money causes states to adopt additional taxation and spending. The 2010 study calculated that federal aid prompts a future state tax increase of between 33 and 42 cents for each federal dollar. Local future taxes and fees added another 23 to 46 cents on top of that.

In Arkansas, the federal government is the third-largest employer, behind the state government and Wal-Mart.

Federal aid is never without strings,and when states aren’t voluntarily signing away bits of their sovereignty for D.C. dollars, the federal courts are eroding the diversity of governance that is the hallmark of federalism.

California’s Proposition 8 is a prime example of robed justices stepping forward to stamp out federalism. In a federalist government, California may want to ban gay marriage, but New Hampshire may not—and that’s okay. The fact that each of the 50 states can ban, embrace or wind up somewhere in between is the genius of federalism, and the cornerstone of self-government.

Why should California voters’ opinions on the issue affect Arkansas voters? Originally conceived, it shouldn’t. But every special interest sports its own attack-dog pack of advocates these days, and their goal is to make their narrow view the “law of the land.” The Constitution explicitly outlined matters eligible for “law of the land” regulation by Congress, and marriage was not among them. Even colonial farmers saw the potential for abuse-and vocally feared a meddling national government that wouldn’t stop at the Constitution’s restrictions.

James Madison answered such criticisms in The Federalist No. 45, explaining the division of powers this way:

“The powers delegated by the proposed Constitution to the federal government are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”

That’s a pretty straightforward presentation of constitutional intent, and a pretty far cry from where both political parties have wandered in recent decades. Under that original limited-government concept, it would be unthinkable that federal funds would ever overwhelm state budgets—and the fact that it has now happened must make us think very hard about its implications.

The American experiment with federalism has always been unique because it recognizes that the capacity for self-government is inversely related to the centralization of power. Local self-government provides the most liberty to the most people, because citizens in various locales can want and achieve different things.

Every time the one-size-fits-all national government declares a “right” over something that the Constitution reserves to the states (like marriage), it reduces liberty for all for the interests of a few.

Many of the Founders were leery of political parties (“factions,” they called them). George Washington worried aloud in his farewell address that over the course of time, parties could be used by unprincipled men “to subvert the power of the people and to usurp for themselves the reins of government.”

A needed revival in federalism is unlikely to originate from either of the main political parties. Change will only come from a third party that isn’t defined by either a narrow agenda or an abstract anti-government philosophy.

I suggest the resurrection of the Federalist Party.

Publius for president! Is he/she out there?


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