Coercive Federalism

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Coercive federalism is a period of American federalism that began in the late 1960's. It is characterized by substantial growth in the power of the federal government relative to the states and by the ability of the federal government to override state powers and impose policies on the states. The term refers to the predominant mode of federal-state relations, especially in policy making, and does not exclude elements of cooperative and dual federalism that still operate in the federal system. Coercive federalism has ten significant characteristics.

One has been an unprecedented increase of policy conditions attached to grants-in-aid, conditions that enable the federal government to achieve national objectives that lie beyond Congress’s constitutionally enumerated powers and also to extract more spending on federal objectives from state and local governments. An example is the 21-year-old alcoholic-beverage purchase-age condition attached to federal highway aid in 1984.

Second, there was a sharp rise in congressional earmarking of specific projects in grants-in-aid, thus denying discretion to state and local officials. The number of earmarks increased from under 2,000 in 1998 to 9,362 by 2003. However, Congress officially prohibited earmarking in 2011 because its fiscal wastefulness provoked public criticism. The ban ended one element of coercion, though not for reasons of federalism.

Third, federal aid has shifted substantially from places to persons; that is, almost three-quarters of federal aid is now dedicated for payments to individuals (i.e., social welfare). For example, Medicaid alone accounts for about 50 percent of all federal aid. As a result, place-oriented aid for such functions as infrastructure, economic development, criminal justice, and education has declined steeply, and increased aid for social welfare has locked state budgets into programs subject to rising federal regulation and matching state costs.

Mandates are a fourth characteristic of coercive federalism. Congress enacted one major mandate in 1931, one in 1940, none during 1941–63, nine during 1964–69, twenty-five during the 1970's, and twenty-seven in the 1980's. The Unfunded Mandates Reform Act of 1995 sharply cut new expensive unfunded mandate enactments, but did not eliminate standing mandates and new less costly mandates. According to the Congressional Budget Office, Congress enacted 57 intergovernmental mandates in 1997-99, 240 in 2000-09, and 243 in 2010-16.

Fifth, federal preemptions of state powers have risen to historically unprecedented levels. From 1970 to 2014, a period of 45 years, Congress enacted 522 explicit preemptions compared to 206 preemptions enacted from 1789 to 1969, a period of 181 years. No post-2014 count is available, but most observers agree that Congress continues to enact large numbers of preemptions. In turn, preemptions are frequently upheld by the U.S. Supreme Court.

A sixth feature of coercive federalism has been federal constraints on state taxation and borrowing, beginning especially with the enactment of limits on tax-exempt private activity bonds in 1984. Federal judicial and statutory prohibitions of state taxation of Internet services and sales are among the most prominent, current constraints. Quill v. North Dakota (1992) prohibits states from requiring out-of-state mail-order vendors to collect state and local sales taxes on purchases made by states’ residents. [Editor's Note: Quill was overturned by South Dakota v. Wayfair, Inc. (2018).] The Internet Tax Freedom Act (2015) permanently bans many forms of state and local taxation of the Internet. The ban had been initiated by temporary legislation in 1998 and renewed periodically. The Tax Cuts and Jobs Act of 2017 limited the state and local government tax deduction for federal taxpayers. This was the first time Congress limited this deduction since enactment of the first federal income-tax in 1862 and today’s income-tax in 1913.

A seventh characteristic has been the federalization of state criminal law. There are now more than 4,500 federal criminal offenses, over half of which have been enacted since the mid-1960s. The number of federal prisoners increased from about 20,000 in 1981 to nearly 184,000 in 2018 after peaking at more than 219,000 in 2013, and the number of federal prosecutors jumped from 1,500 in 1981 to more than 7,000. Generally, federal criminal laws (e.g., drug laws) require longer prison sentences than comparable state laws and make prosecutions and convictions easier than under state laws.

Coercive federalism has been marked, as well, by the demise of executive and congressional intergovernmental institutions established during the era of cooperative federalism to enhance cooperation. Most notable was the death of the U.S. Advisory Commission on Intergovernmental Relations (ACIR) in 1996 after thirty-seven years of operation.

Ninth, there has been a decline in federal-state cooperation in major grant programs such as Medicaid and surface transportation, with Congress earmarking and altering programs more in response to national and regional interest groups than to elected state and local officials.

Tenth, coercive federalism has been marked by unprecedented numbers of federal court orders and large numbers of lawsuits filed against state and local governments in federal courts. Although federal court orders dictating major and costly changes in such institutions as schools, prisons, and mental health facilities have declined since the early 1990's, state and local governments are subject to high levels of litigation in federal courts, with various interests often trying to block major state policy initiatives through litigation. The U.S. Supreme Court resurrected the Eleventh Amendment in the 1990's to restrain some types of such litigation, but the Court’s decisions have been quite limited.


BIBLIOGRAPHY:

John Kincaid, “The Rise of Social Welfare and Onward March of Coercive Federalism,” Networked Governance: The Future of Intergovernmental Management, eds., Jack W. Meek and Kurt Thurmaier. Los Angeles: Sage/CQ Press, 2011, pp. 8-38; John Kincaid, “From Cooperation to Coercion in American Federalism: Housing, Fragmentation, and Preemption, 1780–1992,” Journal of Law and Politics 9 (Winter 1993): 333–433; John Kincaid, “From Cooperative to Coercive Federalism,” Annals of the American Academy of Political and Social Science 509 (May 1990): 139–52; and Congressional Budget Office’s annual report, Activities Under the Unfunded Mandates Reform Act.

John Kincaid

Last updated: March 2018

SEE ALSO: Cooperative Federalism; Economic Development; Education; Enumerated Powers of the U.S. Constitution; Federal Courts; Housing; Intergovernmental Relations; Medicaid; No Child Left Behind Act; Preemption; Transportation Policy; Unfunded Mandates; Welfare Policy