THE current consensus among savants of American federalism is that, at long last, power is shifting back to the states. The Gold War, which gave Washington politicians a national-security pretext for immersing themselves in local tasks like building bridges and highways, is history. Republican majorities, reputedly solicitous of state sovereignty, have controlled Congress since 1995. They promptly enacted legislation that would supposedly kick the congressional habit of heaping expensive obligations on state and local governments but not appropriating the money to help them comply. A year later, Congress also put the states in charge of handling more of the national welfare program. The Clinton administration not only signed off on this devolution but granted state agencies a degree of discretion in administering Medicaid and in managing some aspects of U.S. environmental policy. Much of the energy stirring public policy these days--from school reform to the reprise of prohibitionism (this time targeting tob acco)--seems to emanate from the statehouses. Perhaps most notably, during the past few years the Supreme Court has handed down several opinions that have sought to shore up prerogatives of the states. (Soon there may be a few more of these opinions: In the coming year, the Court will decide whether states can be sued in federal court for alleged job discrimination against persons with disabilities and whether the Army Corps of Engineers can prevent a state from building a landfill that might upset the habitats of some migratory birds.)
However interesting these developments are, their importance is nevertheless being exaggerated. Editorial writers and op-ed commentators seemed inconsolably frightened, for instance, by the Supreme Court's affirmations of states' rights-- which made "a kind of fetish out of state sovereign immunity," opined one in the Washington Post, or even harked back to "racist precedents of the 1880s," declaimed another in the New York Times. In truth, neither the recent body of court decisions nor of legislative initiatives will restore the decentralized federal system that prevailed in this country prior to the latter half of the twentieth century. A bigger, or at least more invasive, central government has been the dominant trend for decades. And signs today (including the latest Republican and Democratic party platforms, neither of which would abolish a single federal agency) augur anything but a radical reversal.
In 1908 Woodrow Wilson observed that the proper relationship between the national government and the states "is the cardinal question of our constitutional system." The question would not be settled by "one generation," he added, but would preoccupy "every successive stage of our political and economic development." The latest round of this enduring debate grapples with the propensity of federal authorities to "preempt" state laws. A glimpse at this controversy is worthwhile, not least because it suggests that the contemporary dissent against federal dominance is by no means steadily gaining traction,
The ink was barely dry on the devolutionary measures of the mid 1990s when state and local officials noticed that their policies were still being displaced by new prescriptions and prohibitions stipulated by federal lawmakers or bureaucrats. Concern over a profusion of such so-called preemptions was duly aired in congressional hearings in 1999, but to no avail. Correctives--such as those in a proposed Federalism Accountability Act authored by Tennessee senator Fred Thompson--were advanced but eventually withdrawn.
The short answer to why projects like Senator Thompson's fizzled is that corporations presently fear aggressive regulators and tax collectors in the state legislatures and bureaucracies even more than the divided, hence suitably gridlocked, governing institutions at the federal level. These business interests now look to preemptive acts of Congress not just to set baselines (floors) below which state policies must not fall but to secure compulsory ceilings on the possible excesses of zealous states. Perceived as disabling this type of legislated constraint on local zealotry, the Thompson bill was zapped by an eleventh-hour corporate lobbying blitz.
And there were other complications. Challenging the ability to preempt ultimately meant questioning multiple forms of federal leverage over the states. The kinds of illustrations offered at hearings before the Senate Committee on Governmental Affairs in July 1999 included more than the much-reviled Internet Tax Freedom Act, which imposes a moratorium on state taxation of Internet retail transactions, and a few other unvarnished injunctions on states and localities. Also on the list of examples were new requirements accompanying federal grants-in-aid and instances of what policy makers a few years earlier had characterized as unfunded mandates: that is, new federal commandments that foisted unwanted financial liabilities on the states.
Measures preempting the states, it appeared, covered a considerable assortment of federal encroachments. There seems to be little perceptible difference between a preemption and, say, a binding national standard, or an inadequately funded mandate, or a restrictive condition tied to federal aid that the states cannot do without. What continued to rankle many governors, mayors, and other proponents of local flexibility, in other words, was more or …