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Statement of

Adam D. Thierer

Walker Fellow in Economic Policy
The Heritage Foundation
Washington, DC

Senate Governmental Affairs Committee
Hearing on Federalism

May 5, 1999

Today's Senate Government Affairs Committee hearing on the state of federalism in the United States is an important and long overdue investigation into the current status of America's constitutional structure of government. Throughout this century, and especially since the time of the New Deal, there has been seemingly little political interest in revisiting and seriously debating the underlying economic, legal, philosophical and Constitutional origins and effects of America's federalist system of governance. Many politicians, interest groups, academics, legal scholars, and even judges have somewhat casually accepted the growth of the national government relative to that of the states and localities. Some even suggest that the expansion of federal authority is a natural outgrowth of an expanding, changing nation and therefore should simply be accepted as the norm. In other words, in the minds of many, federalism long ago ceased to be the subiect of much serious intellectual discourse, debate, or interest.

The Heritage Foundation has long believed this thinking to be as unfortunate as it is misguided Federalism, as framed by the Founders, is needed more today than ever before. Far from being an outdated relic of a bygone age, our Founder's federalist model represents the ideal system of governance for the pluralistic and diverse political climate and culture found in modern America.

The constitutional structure embodied in our federalist system of governance was viewed as the greatest guerantor of liberty and freedom when the Constitution was penned over 200 years ago. With its numerous checks and balances, incentives for political experimentation and creativity, and protections of individual liberty, the American system of constitutional federalism became a model for countless other nations in subsequent years, which all yearned to achieve what America had.

It is sad and somewhat remarkable, therefore, to consider just how far America has strayed from our Founder's first principles when it comes to federalism. Today the federal government is larger and more powerful than ever before. It collects more taxes, regulates more industries and individual endeavors, and usurps the power of state and local governments on an unprecedented scale. Py almost ever conceivable statistical and anecdotal measurement one can think of, the power of the federal government has grown, and grown considerably, throughout this past century.

At one time in American history, such a development would have been incomprehensible. Indeed, as Supreme Court Justice Sandra Day O'Connor aptly noted in New York v. United States (1992): "The Federal Government undertakes activities today that would have been unimaginable to the Framers in two senses; first, because the Framers would not have conceived that any government would conduct such activities; and second, because the Framers would not have believed that the Federal Government, rather than the States, would assume such responsibilities."

Sadly, the state of affairs has grown so grim that proponents or even apologists for the growth of the national government relative to the states can seemingly name no limits to the boundaries of the federal government's all-encompassing power. For example, in the important recent federalism case United States v. Lopez (1995), Justice Clarence Thomas recalls in his concurring opinion that, "When asked at oral argument if there were any limits to the Commerce Clause, the Government was at a loss for words. Likewise, the [government's] principle dissent insists that there are limits, but it cannot muster even one example." In other words, in modern America, federal power is boundless; state power is limited.

This is precisely the opposite of what the Founding Fathers intended. No less an authority that James Madison—the chief architect of the Constitution has articulated this point so clearly when he noted in Federalist #39 and #45 that, "[Federal] jurisdiction extends to certain enumerated objects only, and leaves to the several States a residual and inviolable sovereignty over all other objects.... 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."

It could not be any more clear than that. Yet, regardless of what the Founders said and intended, their federalist system has been neglected, ignored, abused, and corrupted throughout this century. And the consequences of this have been regrettable, albeit quite predictable. As the federal government has grown larger and usurped an ever-expanding range of powers and responsibilities from the States and the people, Washington has become subject to the corrupting influence of special interests; divided by the very factions that the Founders so feared. This, in turn, has fed the national government's incessant appetite for profligate spending on a stunning array of programs that the federal government has no business administering in the first place. As a consequence, taxpayer money has been squandered and the vitality of our once vigorous and politically innovative federalist system has been drained.

Today, therefore, the need to revitalize our federalist system should be obvious. This process should be undertaken because citizen choice, jurisdictional competition, and "voting with one's feet," can make a real difference in terms of revitalizing the American republic. The reinvigoration of federalism can provide a renaissance in public policy making that allows citizens to resolve social and political disputes in a much more satisfactory manner. Most importantly, the restoration of the Founder's federalism can once again secure the rights of the people and ensure the national government returns to its proper Constitutional confines.

By choosing to highlight these issues at today's hearing, the Senate Governmental Affairs Committee has wisely decided to embark on what will hopefully be the first step in an ongoing effort to resuscitate the Founding Father's original system of constitutional federalism. For the Committee's consideration, I have attached for the record a recent Heritage Foundation study I have authored entitled, "Federalism Reform: Seven Options for Congress," which provides a condensed list of federalism reform options that the Committee might wish to entertain to get this process rolling.

Additionally, copies of a recent Heritage Foundation book I authored, The Delicate Balance: Federalism, Interstate Commerce, and Economic Freedom in the Technological Age, have been distributed to every Senator's office and additional copies can be made available upon request. I thank the Committee for receiving my comments and applaud the Committee's members, and especially Committee Chairman Fred Thompson, for undertaking this important inquiry.

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Last May, the White House ignited a surprising political firestorm when it released Executive Order (E.O.) No. 130832 on federalism policymaking. As public awareness of the content of this executive order grew, it triggered a unique series of events that placed the Clinton Administration on the defensive and forced it to acknowledge and, ultimately, to abandon the new form of federalism it had tried to establish through this executive order.

After many years of neglect, Washington's policy elites once again are talking about the importance of federalism in the American system of constitutional governance. Federalism-which uniquely determines the relationship between and among the jurisdictions of the federal, state, and local governments-is perhaps most succinctly described in the words of President Ronald Reagan's Domestic Policy Council Working Group

Produced by

on Federalism: a "constitutionally based, structural
theory of government
designed to ensure political
freedom and responsive,
democratic government in
a large and diverse
society."3 It has long been
considered by many to be
the ultimate guardian of
liberty within the American
Republic.

The Thomas A. Roe Institute
for Economic Policy Studies

The reaction to President Bill Clinton's surprising executive order helped to forge a diverse and bipartisan alliance among Members of Congress, state and local officials, interest groups, legal scholars,

Published by

The Heritage Foundation 214 Massachusetts Ave., N.E. Washington, D.C 20002-4999 (202) 546-4400 http://www.heritage.org

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1. Portions of this paper are adapted from the author's recently published book on federalism. See The Delicate Balance: Federalism, Interstate Commerce, and Economic Freedom in the Technological Age (Washington, D.C.: The Heritage Foundation, 1999), pp. ix-xiv; 40-46; 119-143.

2. President William J. Clinton, Executive Order No. 13083, "Federalism," May 14, 1998; see Federal Register, Vol. 63, No. 96 (May 19, 1998), pp. 27651-27655.

3. "The Status of Federalism in America," A Report of the Working Group on Federalism of the Domestic Policy Council, November

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