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Federalism
Federalism can be defined as the practice of distributing the authority of a central
governing body among smaller, distinct entities. In the context of the United States, this is
outlined in our Constitution, which outlines the distribution of powers between the Federal
Government and State Governments (LaCroix, 2015). The Tenth Amendment of the United
States Constitution articulates the safeguards offered through federalism. “One well-known
provision, regarded by the Court as both a shield and sword to prevent federal encroachment,
is the Tenth Amendment, which provides that 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” (Congressional Research, 2021).
Additionally, the United States Constitution contains other noteworthy provisions that
further exemplify the application of federalism. For instance, the Supremacy Clause found in
Article VI addresses the supremacy of federal laws in comparison to the state and local law, and
the Commerce Clause in Article I governs matters pertaining to interstate commerce. These
clauses illustrate the framework through which Federalism is clarified, as it defines the division
of powers between the federal government and state governments.
The nature of Federalism in the United States has undergone significant transformations
throughout our nation's history. This evolution has seen an ongoing struggle between federal
authority and state autonomy, resulting in four distinct phases: Dualism, Centralizing,
Cooperative, and Creative Federalism (Kincaid & Howe, 2016). Each stage has played a crucial
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role in shaping our government's current division and balance of power. Harry Scheiber (1966)
delineated these four stages as follows:
1. Dualism (1790-1860): During this period, states and the central government shared
roughly equivalent responsibilities.
2. Centralizing Federalism (1860-1933): Federal responsibilities expanded considerably
during this era.
3. Cooperative Federalism (1933-1964): This period witnessed a substantial increase in
social programs stemming from the Great Depression, highlighting a more cooperative
approach between federal and state authorities.
4. Creative Federalism (since 1964): In this contemporary phase, the federal government
actively engages with state and local governments to address various issues.
These historical periods reflect a transition from a time when federal and state governments
often competed to a more collaborative government model. Cooperative and Creative
Federalism both illustrate a flexible relationship in which federal and state powers work
together to solve various challenges.
Federalism Impact on Federal Budgeting
The United States budget is the responsibility of the Federal Government,
encompassing its creation, management, and the task of maintaining financial stability and
balance with the states. This balance is linked with the concept of federalism, as it involves
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fiscal relationships with individual states. The challenge arises when certain states receive
federal funding for specific programs, reducing funding for similar programs in other states.
This relationship of federal and state finances creates a complex system where federal money is
funneled into states for specific programs, and state funds are subsequently allocated to local
government initiatives. The federal government gives money to the states through the form of
grants as a form of leverage to persuade the states to honor the federal government priorities
(Rubin, 2020). This dynamic fosters an intricate dependency, with localities relying on states
and states depending on the federal government budget. “Balance is linked to federalism
because one level of government may seek to balance its budget at the expense of others. The
relationship between states and their local governments is complicated by the fact that the
states are responsible for the financial condition of their local governments; states can only
shift so much of the burden to local governments before they are confronted with the need to
solve the financial problems of their local governments” (Rubin, 2019, P 240).
Numerous programs operate jointly between the federal government and states, with states
desiring the autonomy to allocate funds within their state budgets. Some of these programs
include entitlement programs such as Food stamps, Medicare, and Social Security (Kraft&
Furlong, 2018). However, this independence can be influenced by the regulations that come
with federal funding. When states commit to programs for their citizens and the federal
government subsequently alters the allotted funding, it necessitates a budget restructuring by
state governments. In this context of federalism, a delicate balance exists between the
independence of states and their local governments from the federal government on the one
hand and shared programs and responsibilities on the other (Rubin, 2019, p. 320).
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Federal Agency Spending Impact
The United States Congress plays a role in the approval and oversight of the Federal
Budget, which includes allocating funds to various government agencies. When Congress passes
a budget that designates specific monetary amounts, it grants budget authority to the
respective agencies, allowing them to spend within these allocated limits. It is important to
note that the actual outlays may not occur immediately but could be spread over subsequent
years, particularly for long-term projects. As explained by the CBPP, "For example, a bill that
assigned $50 million for building a bridge would provide $50 million in budget authority for the
coming year, but the outlays might not reach $50 million until the following year or even later,
when the bridge actually is completed." (2020) In the event of unexpected needs or changes,
Congress can reallocate funds through a reconciliation process, which may involve cutting funds
from one program to fund a new one to achieve a balanced budget. Agencies affected by these
cuts must adapt and make informed decisions to manage with reduced resources.
Federal agencies typically strive to stay within their allocated budgets throughout the
year. Toward the end of the fiscal year, agencies assess their remaining funds and often engage
in significant spending to demonstrate the necessity of their budget allocation. This practice is
commonly called the 'Use it or lose it' thought process, where agencies fear that unspent funds
may lead Congress to decide the agency did not require those funds and redistribute those
funds to other areas of the budget. According to CBPP (2020), "Federal agencies spend an
average of 4.9 times more in the last week of their fiscal year than in a typical week during the
rest of the year, even if it results in lower-quality projects."
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Citizens rely on various government services and expect consistent service levels, and
public officials must ensure adequate funding for these programs. Public officials must also be
prepared to address sudden funding needs in response to our ever-changing world. Agencies
must adapt to the changes in the flow of funds. “The annual budget balance should be
constrained by a numeric limit that needs to be respected during budget formation, execution,
and closure. To grant budget flexibility, temporary deviations from the threshold should be
allowed for cyclical deficits and unforeseen extraordinary situations” (Burret, 2014, p. 3).
The allocation of funds for programs and services begins with the federal government's
budgeting process. Holding the federal government accountable for responsible budgeting
ensures that states receive proper funding and can effectively serve their local communities.
This accountability involves monitoring the effectiveness of programs and services and can be
enhanced by appointing monitors to oversee these initiatives. As Shea explains, "Performance
Improvement Officers are responsible for coordinating the performance improvement activities
of their agencies (2008). " This monitoring helps ensure that funds are allocated to programs
with tangible benefits rather than merely supporting agendas with no clear advantages.
Judeo-Christian Analysis of Federalism
Values and ethics should be prevalent throughout our daily lives. Within Christian
beliefs, the view of federalism is rooted in the idea that individuals are part of a collective team,
where decisions are ideally made collectively, with each person contributing their part. This
emphasis on respecting the interests of all involved underlies biblical views on covenants. The
biblical perspective recognizes that due to the presence of sin, there must be limitations on
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government authority. “Because of the presence of sin, government itself must be limited. Rule
by consent, separation of powers, checks and balances, use of a Constitution, and federalism
are all means to limit the sinfulness of would-be rulers” (Fischer, 2013, p. 2). In the context of
public budgeting, federalism aligns with these covenantal principles by involving all
stakeholders in decision-making and ensuring that those affected by these decisions are cared
for in the best possible way.
Over time, the distinction between federal and state governments has blurred, with the
federal government becoming increasingly involved in state functions. As the federal
government provides more funding to states for various programs, its influence expands,
gradually watering down the core principles of federalism. Zackin notes that “Some scholars of
federalism have described an even sharper decline in state power during the second half of the
twentieth century, arguing that the federal government began to coerce formerly
heterogeneous states into enacting uniform Congressional policies” (Zackin, 2011, P 389). This
centralization of power raises concerns and can potentially lead to forms of government
resembling dictatorships or tyrannies.
As responsible citizens, it's essential to exercise caution in placing undue trust in the
federal government, as doing so can diminish the powers of state governments. This sentiment
is encapsulated in the wise words of General Ford, who aptly expressed the dual nature of
political power: "A government big enough to give you everything you want is a government big
enough to take from you everything you have" (Epstein, 2014, p. 18).
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References
Burret, Heiko T.; Feld, Lars P. (2014) : A Note on Budget Rules and Fiscal Federalism, CES ifo
DICE Report, ISSN 1613-6373, ifo Institut - Leibniz-Institut für Wirtschaftsforschung an
der Universität München, München, Vol. 12, Iss. 1, pp. 3-11
CBPP. (2020). Policy Basics: Introduction to the Federal Budget Process. Center on Budget and
Policy Priorities. Brief Background Report. https://www.cbpp.org/research/introduction-
to-the-federal-budget-process
Cong. Rsch. Serv., Intro.7.2.3 The Constitution’s Basic Principles: Federalism, Constitution
Annotated,
https://constitution.congress.gov/browse/essay/intro.7-2-3/ALDE_00000032/
Epstein, R. A. (2014). The classical liberal constitution: The uncertain quest for limited
government. Harvard University Press.
Fischer, Kahlib (2013). "Biblical Principles of Government". Faculty Publications and
Presentations. 525. https://digitalcommons.liberty.edu/gov_fac_pubs/525
Kraft, M. E., & Furlong, S. R. (2018). Public policy: politics, analysis, and
alternatives (6th ed.).
Thousand Oaks, CA: C.Q. Press.
Kincaid , J., & Howe , L. (2016). American Federalism Timeline. Retrieved from
http://federalism.org/resources/federalism-timeline/
Rubin, I. S. (2019). The Politics of Public Budgeting (9th Edition). SAGE Publications, Inc.
(US). https://mbsdirect.vitalsource.com/books/9781544357836 (Retrieved November
16, 2021).
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Shea, Robert J. (2008). Performance Budgeting in the United States. OECD Journal on Budgeting
Volume 8 – No. 1. https://www.oecd.org/unitedstates/43411061.pdf
Quigley, John M., Rubinfield, Daniel L. (1996). Federalism as a Device for Reducing the Budget of
the Central Government. Burch Working Paper No. B96-11.
https://eml.berkeley.edu/~burch/11federa.pdf (Retrieved November 16, 2021)
Zackin, E. (2011). What’s happened to American Federalism? [Review of Federalism: Political
Identity and Tragic Compromise; Safeguarding Federalism: How States Protect Their
Interests in National Policymaking; Governing the American State: Congress and the New
Federalism, 1877–1929, Princeton Studies in American Politics; The Law of American
State Constitutions, by M. Feeley, E. L. Rubin, J. D. Nugent, K. S. Johnson, & R. F.
Williams]. Polity, 43(3), 388–403. http://www.jstor.org/stable/23015030
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