Federalism is Key to America’s Future


Without actually debating the issue head on, the concept of federalism is back as a central focus of American political debates. Federalism, at least as conceived by the Founding Fathers in the Constitution, meant that the central government in Washington had a few, strictly-limited powers, but that an overwhelming majority of what was to be done was to be left to the states and people.

The belief that Washington’s powers were few and limited was so important to the Founders that two separate amendments essentially re-stated this. The 10th amendment clarifies the issue, simply stating “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.”

To say that we have strayed far from this concept over the past 225 years or so would be an understatement. Federal policies now dictate state actions in education, health care, environmental policy, and a wide variety of other regulatory powers (to name just a few).

None of the aforementioned policy areas were named in the Constitution and, given the strict limits placed on federal activities; it seems worthwhile to at least discuss whether Washington has a role in these policy areas at all. But, we have obviously crossed that bridge in the Courts and Congress and now have a $14 trillion federal debt to show for it.

Rather than relying on Constitutional principles alone, it is time to restore federalism based on three basic, pragmatic principles:

  1. States can and should compete with each other and should provide 50 “laboratories of democracy” instead of one centralized government in Washington;
  2. Americans can no longer rely on government debt and cost-shifting to continue favored government programs. In other words, if the citizens of a given state want the government to provide certain goods and services, the citizens of that state should pay for them;
  3. The citizens of New Mexico are likely to want a different government than the citizens of Maine.

Rep. Paul Ryan most recently spurred this discussion in the areas of Medicaid and Medicare (so-called “entitlements) as well as the food stamp program. This is an important step. It is even more important to recognize that the block grant model worked (on a bi-partisan basis) in the 1990s when President Clinton and a Republican Congress successfully reformed welfare.

The “entitlements” are the biggest programs, but the federal role in education has had no positive impact and federal housing policies and programs in fact led to the recent housing bubble. These are just a few areas that would be better managed by the states.

Efficiency and responsiveness to local needs will likely improve under the federalist model I’ve outlined above, but the more important reason for a dramatic devolution of government to the states is the out-of-control debt. New Mexico, like other states, must balance its budget every year. Unlike Washington, we can’t just borrow more money or print it in a dangerous economic game of “chicken.” These constraints force prioritization and avoid the issue of Washington bribing us with our own money as is currently done in Medicaid where New Mexico receives 3 federal dollars for every 1 dollar we spend on the program.

Liberals and conservatives can and should debate the relative size of government and what it provides in their respective states. Citizens of some states will likely want more government spending and higher taxes while others would likely opt for a more minimalist government. The beauty is that we could “vote with our feet” by moving to the place that suits us.

Regardless of one’s preferences, both sides must agree that our current situation is unsustainable and that sticking others – whether they live in other states or in future generations – is simply wrong. Restoring a truly “federal” government as the Founders of our nation intended would resolve many of today’s thorniest problems.

Paul Gessing is the President of New Mexico’s Rio Grande Foundation. The Rio Grande Foundation is an independent, non-partisan, tax-exempt research and educational organization dedicated to promoting prosperity for New Mexico based on principles of limited government, economic freedom and individual responsibility.