I think that, as always, the philosophical basis on which we proceed with these bills and so forth is very important. We need to think that through. What is it we are trying to do? What direction should we be going in, being mindful of the fact that we are not going to, certainly by legislation, cure all the problems or set things right in and of itself. I think it is a question of which direction we go in. Where are we and what direction do we need to go in?

It certainly does seem like the trend has been in a particular direction. There have been fits and starts, but when we look at the areas in which we have had devolution, really, it has to do with giving States a little more authority to implement Federal policy, essentially, is what we are talking about. We celebrate it and I am delighted for it, but that is kind of what we are talking about. I think even the court decisions, like in the Lopez case, for example, the school guns case, well, we solved that by one sentence, I guess, in the next bill that says it does affect interstate commerce, or something like that.

It seems pretty clear that the trend and the direction is pretty much one way and by legislation we are trying to, in some way say, "Wait a minute, let us think about it a little more before we go any further."

I guess my first question is whether or not because of reasons that people give, such as the technological revolution, such as the global economy, such as the industrial marketplace that we have now, whether or not this is a natural and inexorable force. Does all of that militate toward moving away from traditional concepts of federalism? I mean, is this something that is natural and to be expected? If it is, is it inherently bad?

I take it, Professor McGinnis, you think that perhaps it is not necessarily inevitable, that these things perhaps do not necessarily lead one to conclude we should move away from federalism, and that you would think that if we did that, that would not be a good result. Am I characterizing your position correctly?

Mr. MCGINNIS. Yes. I think that is absolutely right, because I think federalism depends on issues about human nature that are unchangeable. Federalism was a way of trying to limit government, and limiting government is a problem of human nature, as I suggest in my testimony. The problem is, we need to have a government that protects our liberties and our property, but a government that is powerful enough to do that can also threaten our liberty and property.

Chairman THOMPSON. The fundamental debate that kicked our government off had to do with different views of human nature, did it not?

Mr. MCGINNIS. That is correct.

Chairman THOMPSON. Can it go back as far as Burke and Rousseau, perhaps, in terms of—

Mr. MCGINNIS. Well, I think it does. It goes back, really-I think much of our debate in this country still goes back to Rousseau on one hand and to the Framers on the other hand.

Chairman THOMPSON. And how our forefathers viewed the French revolution and all that, the nature of man.

Mr. MCGINNIS. I think that is right, and our Framers and people like John Adams were very skeptical that you could ever believe in

the complete beneficence of government. That is why having a structure in which the governments somehow compete with one another is so crucial, I think, to good government and to limited government. I do not think changes in our technology really transform that fundamental issue.

Maybe we have to change the way we deal with things in certain incremental ways, but it does not change the problem fundamentally, because after all, government is still about ultimately the exercise of force, either through enforcing contracts usually, through the police or through the military. And given that it is the exercise of force of some set of individuals over another set of individuals, we have to think about restraining government and new technology really does not change that.

I would say that it is harder to protect federalism today for one reason. I think people have less of an attachment to their States than they did in 1787. General Robert E. Lee said, "I will fight for my country," his country meaning Virginia, in the Civil War. That is inconceivable to us today because of changes in transportation, in communication. But that may mean, actually, we may need to make our governmental structures more protective, not less protective of federalism, because federalism is so important to preserve this principle of subsidiarily to protect against the ambition of human nature that is unchangeable.

Chairman THOMPSON. Plus the fact that the cost of being wrong at the Federal level has gone up, has it not, in terms of reaching for solutions to some of these problems. If you decide what that solution is and you impose it on the 50 States, there is a greater consequence to that than if each State was trying to come to its own conclusion on these things.

Professor Galston, you suggest that we approach these things with no presumption either in favor of federalism or against it. We all pay lip service to federalism as an inherently good thing. What I take it you are saying is that depends basically on the circumstances. Clearly, each level of government has its proper role. Clearly, they are interrelated and interdependent, to a certain extent, and you have to look at the given situation as to whether or not this particular policy is wise.

So does that not leave us with any ability to set a criterion as to what we follow? Should we have a standard when these issues arise as to fundamental principles, as Professor McGinnis suggests there are still present, on which we can bounce these various issues that we are always facing off of? Do you feel that there can be or should be some kind of objective standard that we apply in each of these cases?

Mr. GALSTON. I think that there should be operating presumptions that are appropriate to different policies. So, for example, in the area of education, there is a history in this country which is backed, I think, by our constitutional tradition, as well, that creates a presumption in favors of States and localities and against the Federal Government. That presumption can sometimes be rebutted for cause, but it is clear where the burden of proof lies.

Chairman THOMPSON. Why is that? Is that not rooted in the Constitution itself? Of course, that specific point is not dealt with in

is a State and local matter based upon the Tenth Amendment or whatever other provisions you might want to look at. Is that not constitutionally based?

Mr. GALSTON. Absolutely. But now consider the example that Senator Lieberman gave a few minutes ago of Internet regulation. It seems to me, it is much harder to approach that question with a clear set of presumptions in one way or another, because on the one hand, you have technological change inserted into the requirements of the national marketplace, which is increasingly functioning in a global economy, as we are all aware, and on the other hand, you have a profound, important, and growing set of interactions with State and localities' ability to raise revenues.

So it seems to me it is a question of prudence, judgment, and balance to have a dialogue across the lines of the Federal system to come up with a solution that accommodates the different interests as much as possible, and that is an example of the sort of thing I had in mind.

Chairman THOMPSON. I take it, basically, you would look at it sort of as each side has a competing constitutional basis it can rely upon. One side has the Tenth Amendment; the other side has the Necessary and Proper Clause and the Supremacy Clause and the Commerce Clause. In any given situation, we look at all of that and come up with a solution based upon the facts of the situation, not necessarily historical interpretation as to those particular constitutional provisions.

As the Professor points out, the Constitution theoretically remains the same. As we all know, through interpretation, it changes some. Technology is always changing. How do we strike the balance? Then I will let Professor McGinnis comment.

Mr. GALSTON. The Constitution

Chairman THOMPSON. I am just trying to get kind of an analytical framework. What do we go through? It is not going to be a matter of, well, what do we think this morning would be smart to do. I mean, we do have a Constitution to deal with.

Mr. GALSTON. We do, indeed, and the Constitution has a text and it also has a history of interpretation, which I alluded to very briefly in my remarks. So, as I think Professor McGinnis would agree, the meaning of the Commerce Clause has been elucidated in a series of Supreme Court decisions stretching back almost to the beginning of the republic. There was a great debate between the forces of Alexander Hamilton and the forces of Thomas Jefferson as to the presumption that should be brought to the interpretation of the Commerce Clause, and I think most historians would agree that the expansive Hamiltonian interpretation won out in those decisions of John Marshall.

So that is part of our constitutional tradition. But to get to the broader point, I do believe that in many cases, there will be competing constitutional and policy and prudential considerations which will be attached to different layers of the Federal system and it is going to be a matter of judgment, prudence, and balance to bring them into the most fruitful conjunction that best serves the public interest. I wish I could give you a simpler bright line, but I do not think it exists.

Chairman THOMPSON. Do you want to comment on that, Profes

sor?

Mr. MCGINNIS. I would just like to comment on it briefly. Constitutional federalism cannot only be a matter of prudence. That is illustrated by difficulty with our structure now, because the States really do not have any protections other than at the discretion of Congress, and that in a political sense deprives the States of their few defenses. It makes government bigger because interest groups can always come to the Federal Government and essentially nationalize debates and issues, and that is a problem.

The Framers' Constitution did not make federalism a matter of sufferance of the Federal Government, because they would understand if it is not a matter of sufferance the Federal Government would be where the presumption of action always would tend. It would tend to the people who have the most power.

It is my sense in looking at the Constitution that these matters were not really settled by Alexander Hamilton or John Marshall but much more by the New Deal court, which largely eviscerated all of the enumerated powers. Before that, there was not the plenary spending authority and plenary regulatory authority in the Federal Government, which we essentially have today.

Without some lines, and I have tried to suggest a new way of drawing lines in my testimony, I think you do not have the constitutional restrictions on government which the Framers thought you needed to make the competition work, because they understood that competition will not work if you have one side saying what the rules are, one side both the umpire and the competitor. That is not competition. So that is why I think you need to revive, as Governor Leavitt said, an enforceable federalism.

Chairman THOMPSON. The strength of the National Government, I think, to me, is evidenced by the fact that some of the people pushing in favor of nationalizing some of these rules are normal critics of the Federal Government, and many in the business community in this area because it is much easier to do business under one rule. They look at all these issues in terms of that, what is easier to do business, and it would be. But it goes directly against, many times, in my opinion, concepts of federalism, which you would ordinarily expect them to be supportive of.

Senator Lieberman.

Senator LIEBERMAN. Thanks, Mr. Chairman. That is a good point.

Thanks to Professor Galston and Professor McGinnis for their very thoughtful papers, and thanks to you, Mr. Chairman, for calling them. Professor Galston is someone I have known for a long time. He bears the burden of having spent much of his earlier life in Connecticut. I am pleased to say that his parents are still my constituents, and I have benefited greatly from his work over the years, though, as they say in the preface to the book, I do not hold him accountable for anything I have done with the ideas that he has written.

Professor McGinnis, I am becoming familiar with your work and I respect it greatly. Of course, you came to all of our attention as one of those commentators during the recently concluded national

Mr. MCGINNIS. This is a much happier experience, Senator. Senator LIEBERMAN. That is exactly what I was going to say. It is much more pleasant for you to return to constitutional concepts of federalism.

I thought that Professor Galston made an interesting point in his statement, which is that over our history, one of the reasons why the Federal Government's power has grown is, ironically, to protect the freedom of the individual, the equality of the individual, which was, after all, the original motivating force of our founding documents, certainly the Declaration of Independence right of each individual to life, liberty, and the pursuit of happiness. So it is ironic, in a sense, that we have the big Federal Government having entered, particularly in matters of civil rights, to protect the rights of individuals.

I wanted to ask you, Professor McGinnis, just to give me your reaction to that, and then to ask Professor Galston, and perhaps you, too, to comment on the point that he makes in one of his four final recommendations, which is that the discharge of this obligation, that is, the obligation to protect the rights of individual citizens, will not always be consistent with the preferences of other actors in the Federal system.

Mr. MCGINNIS. Well, Senator, I certainly agree with the point that civil rights have been a crucial addition to our Federal system. Surely even regulatory federalism as I described it could not work for people who could not move from their States, who could not send their capital from their States, and so the Fourteenth and the Fifteenth Amendment were crucial completions to even a system of regulatory federalism. But they went beyond that in giving responsibility to the Federal Government to enforce rights.

I think that system has generally served us well. My own testimony, as you will note, did not call for what actually some people who favor more federalism are in favor of namely doing away with the incorporation doctrine, for instance, of the Fourteenth Amendment.

I think my focus is really on regulation and on spending rather than on rights. I would say that it is not entirely clear to me that every job and title of incorporation has always been good, because I do think there is an experience, as Chairman Thompson has suggested. It is particularly dangerous for the Federal Government to get things wrong, and the Federal Government can even get things wrong on rights. It can get things wrong on the relations between civic responsibility and rights in a variety of areas.

So if I were to discuss the incorporation doctrine, which I do not in my testimony, I would try to figure out ways of tempering that and allow some competition even among rights to happen among the States, but with the basic rights being protected by the Federal Government.

So I agree, that civil rights are a very important completion of our Federal system. But I think civil rights are really not largely the cause of the pictures Chairman Thompson has given us today, the huge growth in government. My focus on reviving regulatory federalism would not be so much to do away with our centralized structure of rights but our centralized system of spending and regulation. I understand they cannot be completely disentangled from