FEDERALISM

UNITARY STATE SYSTEM - Most nations of the world have a central
government in which all real power is concentrated but which have
subdivided their nation into territorial subdivisions to simplify
administration of its land and people by this government.

     __________________________________
     |                                 |
     |  :------:  :------:   :------:  |
     |  : Local:  : Local:   : Local:  |
     |  : Gov't:  : Gov't:   : Gov't:  |
     |  :  "A" :  :  "B" :   :  "C" :  |
     |  :------: ^:--^---:  ^:------:  |
     |            \__|_____/           |
     |  :------:  |        |  :------: | 
     |  : Local:  |Central |  : Local: |
     |  : Gov't:<-|National|->: Gov't: |
     |  :  "A" :  | Gov't  |  :  "C" : |
     |  :------:  |________|  :------: | 
     |           /    |   \            |
     |  :------:v :---v--: v:------:   |
     |  : Local:  : Local:  : Local:   |
     |  : Gov't:  : Gov't:  : Gov't:   |
     |  :  "A" :  :  "B" :  :  "C" :   |
     |  :------:  :------:  :------:   |
     |_________________________________|
  
     For instance, France is divided up into "departments," Japan
into "prefectures," and England into "shires."  Each nation has its
own "Ministry of Education," with branches in each department,
prefecture, or shire.  Although there are local city and regional
governments their officials are largely appointees of the central
government.  Even where they are locally elected, as is the case in
England, they have only those powers and budget that the national
government gives them. 

     The various states that make up the United States have the
same relationship to their local governments.  The various towns,
school districts, counties, and special administration districts
found in Idaho are really just "creatures" of the state government
headquartered in Boise and have little real independence. 

     It should be noted that the mere fact that a nation has a
unitary state system does not necessarily imply that the central
government is oppressive or dictatorial in its exercise of power. 
Many nations with unitary states have their own constitutional
systems that protect the rights of their citizens and prevent the
exercise of unlimited powers by the national government.  Although
each state of the United States is itself a unitary state each
state government also has the feature of "Separation of Powers"
whereby the Governor of the State is elected on a vote separate
from the vote used to determined which party has a majority in the
State Legislature.  With the exception of Nebraska, all states also
have two houses in each state legislature, corresponding in form to
the Senate and House of Representatives in the national government,
allowing the possibility that one political party could win a
majority in the Statehouse of Representatives while the other party
could control its State Senate.  Even if both houses are controlled
by the same party the fact that bills must pass both houses in the
same form still provides each state legislature with its own
internal checks and balances.  In each state the state's system of
courts has its own form of judicial review which allows the judges
of the state to check or overturn actions by the Legislature or the
Governor.  Thus although there is a unitary state within each state
there are also constitutional limits on the power that the state
government can exercise over its citizens, or over its counties
and/or municipal governments.

CONFEDERACY/CONFEDERATION - Another arrangement of government
systems is when several nations together create an alliance, or a
treaty, or a joint economic and customs union, or an international
organization in order to achieve certain common goals.  In this
situation the several member nations each has its own sovereignty
and self-government and the real political power lies in the hands
of each member of the association.  Together the member nations
create another "government" or organization to manage the common
interest of the members but this "government" has only the powers
lent to it by the members, who can withdraw their support at any
time.  Examples of such "Confederations" include the European
Union, the United Nations, the North Atlantic Treaty Organization,
and the Organization of American States.  
     
     :---------------------------------:
     :  ________  ________   ________  :
     :  | Nat'l|  | Nat'l|   | Nat'l|  :
     :  | Gov't|  | Gov' |   | Gov't|  :
     :  |  "A" |  |  "B" |   |  "C" |  :
     :  |______| \|__|___|  /|______|  :
     :            v__v_____v           :
     :  ________  |        |  ________ : 
     :  | Nat'l|  |Central |  | Nat'l| :
     :  | Gov't|->|Confed. |<-| Gov't| :
     :  |  "A" |  | Gov't  |  |  "C" | :
     :  |______|  |________|  |______| : 
     :           /    |   \            :
     :  ________v ____v___ v _______   :
     :  | Nat'l|  | Nat'l|  | Nat'l|   :
     :  | Gov't|  | Gov't|  | Gov't|   :
     :  |  "A" |  |  "B" |  |  "C" |   :
     :  |______|  |______|  |______|   :
     :---------------------------------:

     When I say that each member-state remains "sovereign" I mean
that each member state is itself the final source of law for its
citizens.  Few U.S. citizens would think of themselves in terms of
being citizens of the "United Nations" or of "N.A.T.O."  The
original union of the United States formed by the ARTICLES OF
CONFEDERATION  (1777-1789) was little more than a "league of
friendship" among the thirteen original states whose citizens and
governments did indeed think of themselves as "FREE AND INDEPENDENT
STATES," free and independent not only of Great Britain, but even
of each other.  The Continental Congress had little more authority
over the individual states than does the current united Nations
over its own members.
 
FEDERALISM  - In the scheme of government known as "federalism"
there are at least two levels of government, namely, a "national"
level and a regional one (made up of several regional governments,
whether these are called "states," "provinces," or "republics,") in
which each level of government has certain powers that the other
level does not have.  Thus in the United States the national
government has the power to declare and wage wars, to mint coins
and currency, and to conduct diplomatic relations, powers which the
states do not have.  Each state, however, has a monopoly over
licensing businesses, framing inheritance and marriage laws, and
regulating public education, none of which belong to the national
government.  
     __________________________________
     |  ________  ________   ________  |
     |  |      |  |      |   |      |  |
     |  |State |  |State |   |State |  |
     |  |Gov. A|^ |Gov. B|   ^Gov. C|  |
     |  |______| \|__^___|  /|______|  |
     |            v__|_____v           |
     |  ________  |  v     |  ________ | 
     |  |      |  |National|  |      | |
     |  |State <-->Federal <-->State | |
     |  |Gov. D|  | Gov't  |  |Gov.E | |
     |  |______|  |________|  |______| | 
     |           ^    ^   ^            |
     |  ________/____|___ \ _______    |
     |  |      v  |  v   |  v      |   |
     |  |State |  |State |  |State |   |
     |  |Gov. F|  |Gov. G|  |Gov. H|   |
     |  |______|  |______|  |______|   |
     |_________________________________|

     Federalism is a comparatively rare system of government. 
Examples of federalist political systems include the United States,
Canada, Australia, India, Germany and the current Russian
Federation.  Although Britain is made up of the various "kingdoms"
of England, Scotland, Wales and Northern Ireland, they are in fact
ruled by one Parliament located in the city of Westminster just
west of London.  Federalism is an unusual system because
"sovereignty," the right of a government to rule over a people and
a territory, is usually considered to be indivisible, e.g. if two
nations lay claim to the same territory and people only one can
exercise real control.  If the other seeks to assert control the
result is usually war.  In the case of federalism people are
considered to be citizens of two different governments exercising
control over the same territory, e.g. I am a citizen of Idaho but
also of the United States.  I am subject to the laws of Idaho but
also to those of the United States.  The apparent contradiction is
resolved two ways:  first, each level of government is sovereign
over different areas of law.  Idaho governs the education of my
children but the United States - not Idaho - exercises jurisdiction
over matters such as the Social Security registration, passports
and Selective Service registration status of my children.  The
second way the "dual sovereignty" of federalism is made more
coherent is to view the PEOPLE alone as truly sovereign - it was
the PEOPLE who ordained and established the Constitution that
replaced the Articles of Confederation.  The state governments and
the national government obtain their sovereignty and right to
govern over their separate areas of authority only by the consent
of the PEOPLE who have decided to divide powers between the
national and state governments in this manner.

U.S. CONSTITUTION AND FEDERALISM

     The division of powers is specified in the U.S. Constitution
as follows:  The people and the states have given up certain
ENUMERATED POWERS, OR, DELEGATED POWERS to the national government. 
In Article I, Section 8, Congress has the powers to "collect taxes,
create postal roads, raise an army and navy, declare wars, grant
inventors patents and writers copyrights, etc."  Although they are
listed rather than "numbered" (as suggested by the name "enumerated
powers")  the idea is that they are LIMITED and not limitless,
either in number or in their execution.  A degree of flexibility
has been built into Article I, Section 8 by the final "NECESSARY
AND PROPER" CLAUSE which states that whatever other powers are
needed to carry into execution the mentioned powers are also among
the powers of the United States.  This creates another class of
"IMPLIED POWERS," not mentioned in the Constitution directly but
considered necessary to achieve the purposes for which the
delegated powers were provided.  For instance, the Preamble of the
Constitution  lists among its objects that it is meant "to provide
for the common defense."  While Article I, Section 8, lists the
powers to raise armies and navies and to commission officers it
mentions nothing about creating military academies in which to
train those men who would be commissioned as army or navy officers. 
Nonetheless one could argue that such academies are needed if men
are to be trained to serve competently as officers.  Therefore
providing for military academies can be considered an "implied
power" of Congress.  Similarly providing for the common defense in
the twentieth and twenty-first centuries requires the existence of
an Air Force and even nuclear missiles.  Although the Framers could
not have been expected to conceive of the need for an Air Force one
can similarly argue that it falls within the permissible "implied
powers" of the national government.

     POWERS PROHIBITED TO THE NATIONAL GOVERNMENT - Following the
"enumerated powers" of Article I, Section 8 there is a list of
exercises of governmental powers that are forbidden to the national
government.  These include prohibitions on issuing "bills of
attainder," that is, legislative decrees that deprive individuals
or entire groups of people of their rights of life, and/or liberty,
and/or property without due process of law.  A modern example of
such bills would be the "Nuremburg decrees" of the Hitler regime in
Germany which stripped German Jews of their citizenship and their
civil and human rights.  Another prohibition is on "ex post facto"
laws, that is, laws that become retroactively effective.  In 1938
Congress passed the "Marijuana Stamp Tax" Act that outlawed
possession, sale, transport, cultivation or use of the drug
marijuana and its various forms (i.e. hashish, tincture of cannabis
etc.).  The Act went into effect at the time it was signed into
law.  Those who used (or cultivated, transported, sold, bought
etc.) marijuana up to that time had not committed any crime.  Those
who continued to do so after the Act became law then could be
charged with breaking the law.  An "ex post facto" version of the
law might have declared that anyone who had bought, traded, grown,
or used marijuana in the preceding six months would have also have
violated the law.  Such ex post facto laws offend our sense of
justice and common sense:  Why should people be expected to be
aware of, much less to obey, laws that have not yet been
legislated?  Congress is also forbidden to suspend the citizen's
right to apply for a writ of habeas corpus (i.e. the right not to
be imprisoned arbitrarily without criminal charges), except in
times of national emergency.  Article I, Section 9 listed other
things as prohibited that are more obscure:  Congress could not
limit or prohibit the importation of slaves until 1808 nor impose
an import duty of more than ten dollars per slave until that year. 
Congress could not award titles of nobility, e.g. "Count, Duke,
Duchess, Earl, Marquis, etc." to anyone.

     POWERS PROHIBITED TO THE STATE GOVERNMENTS - Article I,
Section 10 identifies powers forbidden to the states.  Basically
whatever is forbidden to the national government is also forbidden
to the states.  States cannot pass bills of attainder, ex post
facto laws, nor can they grant titles of nobility.  In addition the
states are prohibited from exercising powers that the national
government can exercise that are considered prerogatives of
independent nation-states:  states may not declare war, conduct
diplomatic relations or make treaties with other nations, nor may
they issue their own currency (except silver and gold coins). 
Because the individual states originally conceived of themselves as
"Free and Independent States" one exception was allowed in the
prohibition on their treaty-making powers:  states within the
United States could make "inter-state compacts" with each other. 
Thus states could make the equivalent of "extradition treaties"
with other states to secure the return for trial of fugitive
criminal suspects or runaway slaves, and the like.  Today states
such as Idaho, Wyoming, Oregon and Washington can make inter-state
agreements regarding their common use of the waters of the Snake
River without going through Congress to do so.

     As the Framers believed their proposed Constitution would
create a government of limited, delegated powers they did not
specify what the powers of the states would be.  Their assumption
was that whatever powers had not been exclusively delegated to the
national government nor prohibited to the state governments would
remain lawful exercises of power by the state governments.  If one
reads the delegated powers very literally that would have left the
major portion of powers in the hands of the states.  Nonetheless
many state ratifying conventions required a Bill of Rights to
protect those rights of the people that were not mentioned in the
original seven article of the constitution as well as a more
explicit guarantee of the rights and powers of the states.  As was
mentioned in the lecture notes on the BILL OF RIGHTS the result was
ten amendments, the first eight of which explicitly limited the
federal government in certain exercises of power without, however,
imposing similar limitations on the state governments while the
Ninth and Tenth Amendments addressed the issues of rights of
citizens not mentioned in the constitution and the powers of the
states not mentioned in the Constitution.  

     Amendment IX:  The enumeration in the Constitution, of certain
     rights, shall not be construed to deny or disparage other
     retained by the people.

     Amendment  X:  The powers not delegated to the United States
     by the Constitution, nor prohibited by it to the States, are
     reserved to the States respectively, or to the people.

"RESERVED POWERS"  - Those powers "not delegated to the United
States by the Constitution, nor prohibited by it to the States,"
became known as the "reserved powers."  Originally many Anti-
Federalists and proponents of "states' rights" were pleased with
this arrangement.

     It should be noted that "federalism" is not an intuitive, or
self-explanatory, concept.  Although we take it much for granted
today, when the notion was first proposed it was a very new and
imprecise idea.  To say that under federalism powers are divided
between two levels of government, national and state, still does
not answer the question, HOW MUCH power is enjoyed by the national
government at the expense of the state governments?  Just as the
Anti-Federalists would have rejected the creation of a unitary
state in which the states would have been transformed into
relatively powerless territorial subdivisions of a centralized
national government they would equally have rejected any sort of
federalism in which the national government held more power than
the state government.  Some Federalists, like Alexander Hamilton
actually did want such a form of NATION-CENTERED FEDERALISM in
which the states would be the 'junior partners.'  Many other
Federalists and most Anti-Federalists preferred a STATE-CENTERED
FEDERALISM in which most of the power and prestige would remain at
the state level.  Many of them were satisfied with the division of
power apparent in the Tenth Amendment until the U.S. Supreme Court
ruled on the issue of what "implied powers" belonged to the
national government.

MCCULLOCH V. MARYLAND (1819) - Among the "reserved powers" of the
states were the powers to license businesses, including the power
to charter banks.  The power to charter banks was not among the
enumerated powers of the national government.   However among the
enumerated powers the national government did have the right to
coin money and regulate its value, to impose import duties on
foreign commerce, to tax the states and to borrow money on the
credit of the United States.  In order to accomplish these end the
Congress passed laws in 1798 that created the Bank of the United
States.  Originally this bank had offices only in the District of
Columbia and so the state governments took no notice of it.  In the
early 1800's, however, the Bank established branches in major port
cities located in the states, such as New York City, Boston,
Charleston and Baltimore.  The State government of Maryland decided
to challenge the right of the United States to set up a banking
office in its jurisdiction that had not been chartered under the
laws of Maryland.  To this end the Maryland state legislature
passed a law that allowed banks not chartered in Maryland to
operate in its territory provided they pay a prohibitively high tax
to the state.  The object of this tax was, of course, to force non-
Maryland banks out of business.

     The clerk of the Baltimore branch of the Bank of the United
States, James McCulloch refused to pay the tax and was fined by a
Maryland court.  He appealed this case to the U.S. Supreme Court. 
Chief Justice John Marshall observed the following:

     a)   Although creating a special federal bank was
          not the only possible way for the national
          government to collect import taxes, taxes and
          keep its accounts, so long as Congress
          determined that it was a proper means to do so
          and that some such means was necessary to
          carry on the lawful business of the United
          States, it met the description of an
          unenumerated power that was covered by the
          necessary and proper clause following the
          enumerated powers in Article I, Section 8.

     b)   Observing that "the power to tax is also the
          power to destroy," John Marshall declared that
          the effect of the Maryland banking law was
          essentially to outlaw the Bank of the United
          States

     c)   He then observed that the "Supremacy Clause"
          of Article VI declared that the Constitution
          of the United States, and the laws and
          treaties made by the national government under
          the Constitution together formed the supreme
          law of the land, "anything in the Constitution
          or Laws of any State to the Contrary
          notwithstanding."

     He ruled the Maryland statute unconstitutional and upheld the
claim of implied powers by the national government in the name of
NATIONAL SUPREMACY.  Immediately those who sided with Maryland in
this dispute saw the flaw in their own states' rights position: 
the "Reserved Powers" never specified what those powers actually
were with the same precision that the "Enumerated powers" specified
the powers of the national government.  They then foresaw that the
national government could continue to expand its claims of powers
in the name of the "implied powers" which would have the effect of
reducing the powers of the states.

     Many states' rights advocates denounced this decision as
reflecting the pro-national government bias of a national
governmental institution, the Supreme Court.  Some, such as John C.
Calhoun, argued that if two-thirds of the state legislatures passed
"nullification decrees," declaring that they did not recognize the
constitutionality of an official action of the national government,
that they would be free to ignore those "nullified" laws.  While
Article V of the Constitution specified that two-thirds' of the
state legislatures could initiate the Amendment Process it does not
allow states to overturn the ordinary statutes of Congress on their
own initiative without ratification at the national level.

     This Supreme Court ruling was so unpopular, especially in the
South, that Andrew Jackson was elected President in 1828 in part on
a election promise to states' rights advocates to abolish the Bank
of the United States.  He kept this election promise.  However when
South Carolina objected to a new tariff policy of the national
government and its state legislature passed a "nullification
decree" against the tariff, Commander-in-Chief Andrew Jackson 
mobilized the militias of North Carolina and Georgia and prepared
to march on Charleston.  The government of South Carolina prudently
rescinded its "nullification decree" before any blood could be
shed.  This illustrates a principle of political psychology:  "How
something looks depends on where you stand."  Andrew Jackson as a
pro-states' rights  presidential candidate took a hard line against
the "presumptions" of the national government in imposing its Bank
on the states.  President Andrew Jackson in Washington D.C. would
take a different view of the wisdom of national supremacy and was
ready to fight a civil war with South Carolina over the
nullification issue.

     Sadly, the incident with South Carolina was merely a minor
dress rehearsal for the Civil War.  Largely this war was fought
over the issue of whether the Constitution created a State-centered
Federalism as opposed to a Nation-centered Federalism.  The
military defeat of the southern "confederacy" did not answer the
legal and constitutional question by itself.  In reality the
Confederate States of America were forced in practice to repudiate
the loose, state-centered federalism they had advocated against the
nation-centered federalists:  They created a centralized government
and national army.  This government pre-empted the exercise of the
individual states' powers as much as Washington D.C. had ever done. 
On top of that this government still ended up losing the war, which
sufficed to persuade most Southerners that it had been a losing
venture to begin with.

RECONSTRUCTION AMENDMENTS:  Having won the war the Union now had to
clarify the legal and constitutional issues that the war itself
could not resolve.  The THIRTEENTH AMENDMENT abolished slavery,
which had been the immediate issue over which the issue of state-
centered federalism versus national-centered federalism had come to
a head.   Because the of decision of the U.S. Supreme Court in Dred
Scott v. Sanford (1857) that ruled, among other things, that
African slaves could not become U.S. citizens even if they had been
freed the FOURTEENTH AMENDMENT established that all persons born in
the United States, or naturalized under its laws, were U.S.
citizens and that they were also citizens of whatever state in
which they resided.  This clarified that United States citizenship
took priority over one's state citizenship.  This Amendment contain
an EQUAL PROTECTION CLAUSE that forbade the states from depriving
U.S. citizens of life, liberty or property without due process nor
could they deny any person the equal protection of the laws. 
Essentially this was intended to prevent the southern states from
discriminating against the former slaves and African freedmen who
were now declared to be U.S. citizens as well as citizens of the
various states in which they resided.  The FIFTEENTH AMENDMENT
forbade states from preventing African-American U.S. citizens from
voting due to their race or having once been slaves ("previous
condition of servitude").

     The southern state governments bitterly resented these
Amendments but their legislatures ratified them as a condition for
being able to continue to seat their Representatives and Senators
in Congress.  However this situation led to the promotion of a
revised view of federalism, under the name of "dual federalism." 
In 1876 a Democrat, Samuel J. Tilden won 51 percent of the popular
vote but failed to gain an Electoral College majority.  When the
House of Representatives met to cast votes by state delegations to
elect the next President, the Republicans cut a deal with Southern
Democrats:  if they would cast their vote for the Republican
candidate, Rutherford B. Hayes, they would ensure that the
Fourteenth and Fifteenth Amendments would not be enforced
vigorously by the Republican-controlled national government.  This
was done in the name of "dual federalism," that is, a "gentlemen's
agreement" to respect the existing division of powers between the
national and state governments as equitable and inviolable.  The
national government would not infringe further on the remaining
"reserved powers" of the states as long as the states accepted the
existing enumerated and implied powers of the national government
as legitimate.  In effect, this was the final peace treaty that
laid the causes of the Civil War to rest.  African-Americans were
ill-served by this agreement, however.  Since the Fourteenth
Amendment specifically protected those new citizens only from
actions of state governments it was not held to forbid numerous
forms of private and public discrimination, including officially-
supported segregation, that were not held to involve basic and
fundamental rights.  When a man of one-eighth African descent
objected to the state of Louisiana's requirement that "colored"
railroad passengers sit in separate accommodations from white
passengers the U.S. Supreme Court ruled that such segregation did
not violate the Equal Protection Clause of the Fourteenth Amendment
so long as the separated facilities were "equal" to those being
provided to white passengers.  
     
     Dual federalism also allowed the southern states  in their
exercise of the "reserved power" of conducting elections as they
saw fit as long as they did not violate the letter of the Fifteenth
Amendment.  Although electoral laws could not forbid individuals
the right to vote simply because they were African-American such
laws coule be were written in an apparently "color-blind," or "race
neutral" manner to still make it impossible for African AMericans
to vote.  Most African-Americans following the Civil War had
limited educations.  In fact, in the years prior to the outbreak of
the Civil War most southern states had outlawed teaching reading
and writing to slaves under severe legal penalties.  Thus many
states instituted "literacy tests" that made it impossible for
illiterate former slaves to vote.  Since many dirt-poor whites also
could not read or write a special clause was written into such laws
to allow illiterates to vote, provided either their father or
grandfather had already voted.  Of course such "grandfather
clauses" were of no use to those whose fathers or grandfathers had
either been slaves or else, as African-American freedmen, had not
been allowed to vote due to the Dred Scott ruling.

     The Fourteenth Amendment eventually served to limit the powers
of the states in another way.  The selective INCORPORATION OF BILL
OF RIGHTS referred to in the lecture notes on the Bill of Rights
meant that those parts of the Bill of Rights that had served to
limit the power of the national government to restrict rights of
religious freedom, of speech, of the press and of peaceable
assembly and petitioning the government for redress, as well as
those amendments protecting the rights of the criminally accused in
federal courts were eventually all interpreted by the Supreme Court
as restricting the state government powers over the same areas.

     Eventually the national government departed from the
compromise of dual federalism in order to force southern and
certain western states to comply with the spirit of the Fourteenth
and Fifteenth Amendment with respect to the civil rights of African
American citizens.  In passing its 1964 Civil Rights Act Congress
invoked its enumerated power of "regulating interstate commerce" to
claim an implied power of prohibiting segregation in public nd
private accommodations.  The argument went as follows:  by
permitting or enforcing racial segregation in restaurants, motels,
hotels, restrooms, trains, buses and airplanes the states were
discouraging African Americans from engaging in interstate travel
and tourism, which in turn hurt interstate commerce.  In the name
of regulating interstate commerce such discrimination was
forbidden.  This may seem like a circuitous route to enforce the
Reconstruction Amendments but it allowed Congress to sidestep
nearly 90 years of Supreme Court decisions that upheld the doctrine
of dual federalism, including its racist implications.

MODERN FEDERALISM - Although Congress has restrained itself from
aggressively expanding its powers in the name of implied powers,
with the exception of its claims to regulate interstate commerce,
it has found another way to make the state governments comply with
its wishes without offending the sentiments of dual federalism and
of states' rights advocates.  Beginning in 1913, with the Sixteenth
Amendment allowing direct national taxation of incomes, Congress
created the Internal Revenue Service and began collecting
individual income taxes.  These taxes were originally very modest--
-about $6 per household per year--and without a large federal
bureaucracy or standing army and navy to support, the federal
budget began to pile up excess revenues from year to year.  During
the Great Depression the Roosevelt administration tried to find
ways to stimulate the economy and get the millions of unemployed
American workers and heads of households back to work.  The
national government made its national budgetary surplus available
to the states in the form of grants-in-aid.  Although such grants
had existed as far back as the Civil War, they had seldom been used
to any great extent.  Under their reserved powers and the spirit of
dual federalism, it was largely state governments that had the
power to handle public welfare and to conduct public works
projects.  While the states lacked the funds to do these things,
the national government had the funds but merely lacked the powers. 
With the disbursement of billions of dollars in aid to the states
to put millions back to work FISCAL FEDERALISM was born.

     Most of the grants-in-aid consist of CATEGORICAL GRANTS, that
is, payments of money to spent on certain "categories" of spending
- such as, Secondary education, prison facilities, public parks,
water reclamation projects, soil conservation projects, and the
like.  With every categorical grant there are CONDITIONS OF AID, or
CROSS-CUTTING REQUIREMENTS that establish the eligibility of state
and local governments for such funds, how much matching money each
state or locality must provide, and how the funds must be spent. 
For instance, in the case of funds for Interstate Highway
construction there are technical requirements that ensure that the
design and quality of highways will not vary greatly as one drives
from state to state.  [Note: this ensures, among other things, that
we don't suddenly find ourselves in a jurisdiction in which cars
must drive on the lefthand side of the road, or in which four-lane
highways are suddenly narrowed down to a narrow two lane highway. 
It does not ensure perfect uniformity in quality:  because the
State of Texas always put an inch extra of asphalt and concrete on
its Interstates more than did the poorer State of Oklahoma driving
across the state line from Oklahoma into Texas is usually a teeth-
jarring experience for the uninitiated.]

     Over the years the states have come to expect federal funds in
the form of grants-in-aid as a matter of right.  Some people have
asked, "If forty-nine of the fifty states require balanced budgets
[Vermont is the exception] why can't the U.S. government do the
same?"  Part of the answer to this lies in the fact that about 15
percent of the U.S. budget is spent on the states either as direct
grants-in-aid or else in the form of maintenance of federal
facilities, e.g. military bases, custom houses in ports and
airports, and national parks and forests, that fully 10 to 20
percent of most state budgets depend on federal funds.  The
alternative to receiving such funds would be, if state spending
were to be maintained at the same levels, to increase state taxes
by the amount of federal funds foregone.  In the case of the State
of Idaho, which has a state budget of $1,967 million (of which 6
percent, or $118 million come from grants-in-aid or other federal
funds) that would equal at least $107 per person in extra state
taxes per year.

     Naturally with such dependence on federal funds the states
have made themselves more vulnerable to co-optation by the national
government.  Once states come to depend on such funds, as the
grants-in-aid programs are renewed by each Congress each year the
legislation is re-written and re-legislated, often with, changed
requirements.  When the national government imposes new
requirements that make receiving grants-in-aid dependent on
conditions that are not part of the original purpose of the grant
these requirements are referred to as CROSS-OVER SANCTIONS. 
Examples would be the lowering of the Interstate maximum speed
limit from 75 m.p.h. in 1974 to 55 m.p.h.  This lowering of the
speed limit was imposed as a way of forcing conservation of
gasoline in the wake of the Arab oil embargo of 1973-1974.  In the
mid-1980's public outrage over the killing of children by drunken
drivers led to an amendment of the Interstate funding program that
required states to raise their drinking ages from 18 or 19 to 21 or
else face having 5 percent of their previous year's funding cut
from their current highway funds.  Most states complied rather than
face this cut-off.