Mario Loyola @ The American Interest:
For decades, Democrats and Republicans alike have invested heavily in governance schemes that erode the Constitution’s separation of powers and mar its proper functioning. The Federal judiciary has uniformly rubber-stamped these schemes. The consequence has been an unsustainable spree of borrowing, spending and overregulation at the Federal level, cyclical fiscal crises at the state level, and less accountable and less representative government at every level.
These governance schemes are generally of two kinds: one erodes the separation of powers between Federal and state governments, while the other erodes the separation of powers within the Federal government. In the first category is “cooperative federalism”, whereby the Federal government uses monopoly powers to coerce and subvert the prerogatives of state governments. In the other is Congress’s delegation of vast rule-making authority to administrative agencies.
These two categories of concern are often treated as being entirely distinct, but they share profound similarities. Both are methods for Congress to escape accountability by hiding its power in other institutions of government. Cooperative federalism allows Congress to hide its power within the decision-making of state governments, while its delegation of rule-making authority allows it to hide its power in the far-flung bureaucracy of the Executive Branch.
The Federal judiciary has a crucial role to play in maintaining and policing the boundaries of America’s basic institutions of state. It is a role it abdicated when confronted with the popular nationalist programs of the New Deal. The constitutional doctrines the judiciary has invoked to let Congress blur these critical separations of power are deeply flawed as a matter of constitutional law, and they have ultimately become unsustainable as a matter of political economy. Federal courts must begin to enforce a strict separation of powers, both between the Federal and state governments and within the Federal government itself. And Congress itself must start undoing the consequences of its own self-indulgence.
The Trojan Horse of Cooperative Federalism
here are two main species of cooperative federalism. The first is Federal assistance grants such as Medicaid, in which Congress gives money to state governments on condition that their programs comply with Federal preferences. The second is cooperative regulation, in which the Federal government allows states to implement Federal regulations themselves, also on condition that they meet certain requirements (known as “conditional preemption”).
Both sound nice, but both violate the principle of federalism in the Constitution, under which states are declared sovereign and the powers of the Federal government are specifically enumerated and correspondingly limited. Both allow anti-competitive political cartels in Congress to strangle innovation and regulatory competition at the state level by using the federal machinery to impose an uncompetitive policy baseline on everybody.
At the Supreme Court, federalism has staged a promising comeback, though it is still little more than a rear-guard action. The Court ruled in Garcia v. San Antonio Metropolitan Transit Authority (1984) that the limits on Congress’s power to control state governments depend on the national political process itself—in other words, on Congress’s self-restraint. Backing away from this dangerous idea, two crucial cases of the Rehnquist Court established the blanket principle that the Federal government cannot command state governments to do anything.
New York v. United States (1992) struck down part of a Federal law because it required states either to take title to low-level radioactive waste generated within their borders or to regulate its disposal according to Congress’s instruction. “In this provision”, reasoned the Court’s majority, “Congress has crossed the line distinguishing encouragement from coercion.” Congress could not force states to choose between two alternatives, neither of which Congress had the power to impose “as a free standing requirement.” Writing for the majority, Justice Sandra Day O’Connor wrote, “While Congress has substantial powers to govern the Nation directly, including in areas of intimate concern to the States, the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress’ instructions.”
