political commentators, and average citizens who believed that E.O. 13083 violated certain sacred tenets of the U.S. Constitution on the proper division of powers for the various levels of government. This alliance signaled a renewed interest in Washington, and among the population at large, in examining how best to reinvigorate and protect the Founding Fathers' original system of federalism. In fact, the renewed focus on protecting federalism eventually forced President Clinton to withdraw his executive order just a few months after issuing it.

Sadly, however, President Clinton appears not to have learned any lesson from last year's federalism fight. In his recent State of the Union Address, he showcased a litany of new federal programs that ignore the proper constitutional balance of powers by promoting even more federal intrusion into matters that are best dealt with by state or local governments.

As the 106th Congress--the last Congress of the 20th century begins its important work, it must examine the system of government that has developed over the past decade and delineate areas in which reform is needed to protect the Framers' dynamic system of federalism for the future. Legislators must establish firm principles and strategies to reinvigorate federalism, and then devise a timetable to accomplish these goals in the near and long terms. If the 106th Congress succeeds in doing so, this accomplishment may stand as its most important legacy to future generations.

A CONFLICT OF VISIONS: RESTORING VS. REMAKING FEDERALISM

President Clinton's Executive Order No. 13083 on federalism outlined a set of new "Federalism Policymaking Criteria" that would have given federal bureaucrats and regulators generous

4. Executive Order 13083, op. cit.

January 27, 1999

6. Ibid.

59-454 99-8

Within these two orders are two distinct visions of federalism. President Reagan's vision stressed, above all, adherence to the original intentions of the Founders and the language of the Constitution regarding the federal government's limited, enumerated powers, and it promoted a healthy respect for the benefits of state and local autonomy. President Clinton's vision, on the other hand, is based on a new federalism paradigm that calls for greater constitutional malleability and an acceptance of the frequent need for federal intervention to alleviate any ill.

THE PUBLIC REBUKE OF E.O. 13083

President Clinton's federalism manifesto did not initially generate a great deal of media or public attention because the White House quietly released E.O. 13083 in early 1998 while the President was out of the country. But, by midsummer, a growing number of Washington policymakers, state and local officials, and national organizations had become sufficiently concerned about its potential effects to begin asking the Clinton Administration to explain its new thinking on federalism.

Their concerns culminated in a hearing on July 28, 1998, in the House Government Reform and Oversight Subcommittee on Regulatory Affairs. During this hearing, the Clinton Administration was castigated uniformly for its decision to abandon the fairly non-controversial Reagan executive order and impose the new federalism guidelines that appeared to grant the federal government unlimited policymaking authority over the states.

Several Members of Congress condemned President Clinton's new federalism guidelines and introduced legislation to force him to revoke his executive order. For example, a Sense of the Senate Resolution introduced by Senator Fred Thompson (R-TN), which encouraged the President to revoke his order, passed by unanimous consent in late July. Dissenters in Congress were joined by

January 27, 1999

representatives of many well-respected state and local organizations, including the National Governors' Association, the National Conference of State Legislators, the United States Conference of Mayors, the National League of Cities, and the National Association of Counties.

On August 5, the White House finally succumbed to this intense pressure and announced it would suspend the proposed executive order "in order to enable full and adequate consultation with State and local elected officials, their representative organizations, and other interested parties." At least temporarily, the bipartisan alliance of those who understood the Constitution's firm limits on the scope of federal power had prevailed.

THE NEED FOR REFORM

The temporary victory for the ardent supporters of a limited, constitutional government was largely symbolic. There remains a strong and continuing need to formulate comprehensive federalism reforms to revive, reinvigorate, and protect the Founding Fathers' delicate balance of powers so carefully delineated in the Constitution.

Restoring the proper balance of power between the states and the federal government will not be easy, but it can and must be done. Several decades of legislative abuse and judicial neglect have left the Founders' federalist system in disarray, largely because, as Supreme Court Justice Sandra Day O'Connor observed,

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 sec-
ond, because the Framers would not have
believed that the Federal Government,
rather than the States, would assume such
responsibilities.8

It is important to note that most of these strategies are not new ideas; indeed, the principles behind them date back to the age of the founding of the American Republic. Unfortunately, the principles and protections in the original federalist system of governance established in the Constitution have been eroded by a century's worth of corrupt jurisprudence and unwarranted advances by federal legislators and regulators. And, with the notable exception of the passage of the Unfunded Mandates Reform Act (UMRA) of 1995, efforts to revive and reinvigorate these principles have not been forthcoming. The reform objectives and strategies set out here are steps in the proper direction, are supported by numerous national groups, and are vital if Congress wishes to reestablish the centrality of federalism for a vigorous constitutional republic.

SHORT-TERM FEDERALISM REFORM
STRATEGIES

The 106th Congress faces a crowded legislative calendar that may be abbreviated further by the upcoming presidential election cycle. With this in mind, Members of Congress should dedicate the next few months to advancing federalism reforms that uphold and protect the constitutionally delineated balance of power. Fortunately, two simple but important reform strategies can be introduced immediately that would make this possible:

Strategy #1: Congress should codify

President Ronald Reagan's Federalism
Policymaking Criteria in Executive Order
No. 12612.

January 27, 1999

To guide the process of assessing jurisdictional responsibility and limiting the role of the federal government to tasks that are permissible under the Constitution, Congress would be wise to codify President Reagan's excellent federalism policymaking criteria contained in E.O. 12612, which was issued on October 26, 1987.10 This action would establish clear and firm guidelines for Congress and executive branch agencies to follow when they set about crafting new public policy with federalism implications.

E.O. 12612 called for strict adherence to constitutional principles. It directed cabinet agencies and executive branch offices to

restore the division of governmental
responsibilities between the national gov-
ernment and the States that was intended
by the Framers of the Constitution and to
ensure that the principles of federalism
established by the Framers guide the
Executive departments and agencies in the
formulation and implementation of
policies.

In Section 3, executive branch agencies were ordered to follow a strict set of Federalism Policymaking Criteriall "when formulating and implementing policies that have federalism implications." (See Appendix for the full text of E.O. 12612.) For example:

"Executive departments and agencies should closely examine the constitutional and statutory authority supporting any Federal action that would limit the policymaking discretion of the States, and should carefully assess the

10. Executive Order 12612, op. cit.

necessity for such action. To the extent practicable, the States should be consulted before any such action is implemented.

"With respect to national policies administered by the States, the national government should grant the States the maximum administrative discretion possible. Intrusive, Federal oversight of State administration is neither necessary nor desirable.

"Executive departments and agencies shall: (1) Encourage States to develop their own policies to achieve program objectives and to work with appropriate officials in other States. (2) Refrain, to the maximum extent possible, from establishing uniform, national standards for programs and, when possible, defer to the States to establish standards. (3) When national standards are required, consult with appropriate officials and organizations representing the States in developing those standards."

Although widely ignored by most regulatory agencies then and now, President Reagan's executive order was an important acknowledgment of the federal government's overwhelming power relative to the states. On a more practical level, E.O. 12612 provides a roadmap for returning to the Founders' framework by encouraging federal officials to work more closely with the states.

It is fortunate, therefore, that the Clinton Administration's attempt to revoke President Reagan's executive order was repelled successfully by a bipartisan effort. It is important that the criteria embodied in E.O. 12612 be codified so that future Administrations cannot thwart the spirit of the Constitution. For example, codification of E.O. 12612 would require "Federalism Assessments" of any proposed rule that might have substantive federalism implications. These assessments would be

12. Public Law No. 104-4, March 22, 1995.

January 27, 1999

reviewed by the White House's Office of Management and Budget (OMB) and by Congress to ensure that federal agencies abide by the Constitution and respect the autonomy of state and local governments.

Statutory codification of Reagan's Federalism Policymaking Criteria could take many forms. Congress, for example, could take the language of the executive order and codify it as law without significant changes or accompanying statutory language. This approach was taken in two bills that were proposed during late summer 1998: the Federalism Enforcement Act of 1998 (S. 2445) introduced by Senator Fred Thompson and several cosponsors, and the Federalism Act of 1998 (H.R. 4422) introduced by Representative James Moran (D-VA) and cosponsors from both parties. Both bills, despite minor differences regarding the inclusion of judicial review language, relied heavily on the language of E.O. 12612.

A second option would be to amend existing statutes that deal with jurisdictional matters, intergovernmental affairs, or regulatory policymaking. Two legislative vehicles that could be amended to include the federalism guidelines and protections in E.O. 12612 are the UMRA 12 and the Congressional Review Act (CRA), which was implemented as part of the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996.

13

The UMRA was one of the first pieces of legislation enacted by the 104th Congress. It requires the Congressional Budget Office (CBO) to estimate the costs of proposed mandates on state and local governments, and allows a point of order to be raised against any bill or joint resolution that lacks such an estimate or results in direct costs to state and local governments of more than $50 million.

The UMRA has been helpful in allowing Members of Congress to deliberate more carefully