From the Founder’s Federalism to the Administrative State | Paul Moreno
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From the Founder’s Federalism to the Administrative State | Paul Moreno

I’m going to defend the kind of states rights of federalism that professor Barbara has described. No Calhoon-ite but there is, I think, an alternative to the kind of national federalism that he did describe. I’m going to claim that that was the Founders constitutionalism or the Founders view of federalism,
which was meant to prevent unlimited government or the kind of centralized
bureaucratic state that we have today. On the other hand, I do want to emphasize
that the Founders believed that federalism was instrumental. Federalism was not something that was an end in itself or good for its own purposes but it was
meant to protect a more fundamental value. The value of liberty. Federalism can indeed become destructive of liberty or of the things that people
established governments for. Professor Michael Greve has written at length about the way
that federalism can become destructive rather than preservative of liberty. The
Founders, and I think you can see this in the Declaration of Independence in
many of the revolutionary political statements, believed that government
needs to be kept limited. The Revolution was a revolution against a
centralized administrative power. To read the Declaration of Independence it complains, maybe a bit unfairly, that the King has sent hither swarms of officers to eat out our substance. That’s the kind of government that the Founders were trying to prevent. So they
had a very decided animus against a centralized administrative state. To
some degree they overdid it and some of the mistakes they made in the Articles
of Confederation and the state constitutions were because of an overly
exaggerated fear of centralized and especially of the executive power. One of the things that the Constitution does is it sort of corrected for the excesses of legislative tyranny and of a legislature that was interfering in the details of
administration and tried to establish a greater balance between the executive
and legislative power. I think the main thing for the framers of the
Constitution was that the Constitution would give us the benefits of centralized government or of
a unitary state when it came to foreign affairs but to leave domestic affairs to
state and local authorities. As Professor Barbara mentioned and then we talk about
at greater length during the Q&A. I just like to read a very short section from
federalist number nine where Publious talks about advantages of this kind of
never-before-seen combination of a confederal government and unitary
state, which they took from Montesquieu. It is very probable that mankind would
have been obliged at length to live constantly under the government of a
single person had they not contrived a kind of constitution that has all the
internal advantages of a republican together with the external force of a
monarchical government. I mean a Confederate Republic. This form of government is a convention
by which several smaller states agreed to become members of the larger one,
which they intend to form. It is a kind of assemblage of societies that
constitute a new one capable of increasing by means of new associations
till they arrived to such a degree of power has to be able to provide for the
security of the united body. A republic of this kind able to withstand an
external force may support itself without any internal corruptions. The form
of this society prevents all manner of inconveniences. I think this is what
leads to Madison description in Federalist 39 of the compound republic
of the idea that we are one polity when it comes to especial external affairs,
but we are several when it comes to internal affairs. The expectation of
the Founders was that the states would jealously guard their police
powers. The all-purpose power of government. The reserved powers of states; the power to legislate and regulate the safety health welfare and morals of the people. And thus if you look at the structure
of the Constitution you find Federalism or the principle of these
division of powers throughout the constitution of the many auxiliary
precautions that Madison says were built into the constitution to keep other
government limited. You find these principles of Federalism or
divided power within these auxiliary provisions as well as among them. There is not only a separating power between the various branches of government, in the different
levels of government, but also within each of these structures of government. There’s more than just a double security for the rights of the people in the Constitution.
We’ve mentioned already the enumeration of powers in Article 1 Section 8 and the
way the Tenth Amendment reiterates that. The very question of federalism is really the question of whether congress is limiting itself to its enumerated powers and what are the reserve powers of the states? Bicameralism, not only is congress
separated from the state legislatures, but Congress itself is divided and the
states as states, before the 17th Amendment especially, are in the national legislature. The Electoral College. The way we choose
the President and the Founders believed that most of the time nobody would have
a majority of the electoral college so this states would essentially choose the
President through the House of Representatives. Even when the system
was preempted by the development of parties, political party, by which you could usually could normally translated a popular majority into electoral college majority. We that we should remember that parties themselves were principally state and local
governments until well into the 20th the Century. Supreme Court in the federal judiciary
for a long time before the 20th century there was a de facto regional representation within the Supreme Court. You couldn’t have all the justices come from Massachusetts or New York. They were
distributed among the country according to other factors to represent justices. And of course the amending process. The process of formally amending the Constitution
cannot be done without the states. So every part of
the constitution has of some sort of federal element. But what I really want to talk about though is what happened. How did this system of the compound republic and of the state’s defending themselves against the establishment of a centralized administrative state. How did that breakdown? After about a century or so, late 19th
and early 20th century began to see the emergence of the modern administrative
state. For the most part the answer is the state’s did it to themselves. State politicians began to see the advantages of giving the federal
government more power especially the federal government being able to share
revenue with the states. Mostly it is the state’s sort of gave up their reserve powers for the benefits that in state politicians saw coming by the
distributive fiscal policies of the federal government. Especially after the
16th Amendment, this is why the income tax amendment is so important. It’s also due to the fact that many of
our constitutional inhibitions were loosened by a new political and
jurisprudential theory in the nineteenth century. This is where the school of
thought, known as various schools of thought, that you can group together as
progressivism began to erode at the way that people thought about the theory
and the structure of the Constitution. Within the legal field in particular schools of
thought like sociological jurisprudence in legal realism and the law schools and the judiciary began to adopt political theories that were at odds with
those of the Founders. Another very important reason for this was at the end
of the 19th into the 20th century you began to see more of a blending of
foreign policy powers into domestic affairs. You could see this earlier in
the 19th century especially in immigration law. There are many legal
scholars are doing very interesting work talking about the origins of American
administrative law in immigration law in the late 19th century. When it came
to dealing with Chinese immigrants especially, basically anything that the
Immigration Bureau wanted to do was okay. The kind of discretionary flexible
power that bureaucracies are supposed to have you can see first in immigration law.
Right at the turn of the century with American imperialism as the United States
became a world power. You began to find more articulate
arguments against constitutional or limited government. The nearly Constant wars of the 20th
century are become one of the reasons why American government, the American federal government, has become way more unlimited. If any of you flew here to this conference and you went through the airport and dealt with transportation authorities, you can see what the administrative state is like. That kind of unlimited power
and also seeing the way in which how quickly people can sort of accommodate
themselves. How used we have become to that kind of power? Another reason why this occurred was in
late 19th and early 20th century America there was a series of popular crusades
against various vices, by which Congress began to acquire power that was really
the police power of the states. Congress enacted laws to control gambling for
example under its power to regulate interstate commerce because gambling was so widely regarded as as an evil. To combat prostitution, Congress passed the
Mann White Slave Act in 1910. Something that was clearly trying to regulate the morals of the people but was accepted because it was so widely
unpopular as an exercise under Congress’s commerce power. Congress also use its taxing power to do away with dangerous products in the
national market. Things like phosphorous matches. Narcotics were controled by the taxing power. And that very dangerous article of commerce Oleomargarine. It was one of the things that Congress acted upon in in these years. So by the foreign policy powers, by the taxing powers, by the
interstate commerce powers, Congress began to expand its field of operations. But
mostly it came about from what used to be called the grant-in-aid or federal
revenue sharing. The spending power as it’s sometimes called where congress would give money to the states in order to get them to do things that Congress could
not do. In the early decades of the 20th century to get the stage to do things
like build roads, to improve their educational systems, the first federal
involvement in health care, came about by the federal government
sharing money with the states. One good example of this was when the Roosevelt
administration, FDR’s administration, was trying to come up with a basis for what
is today the social security system. Justice Harlan stone, who was on the Supreme Court, told frances perkins, FDR’s Secretary of Labor, I just use the taxing power. You
can do anything by Congress’s power to tax and spend. That was the genesis
of social security and security. And Social Security gradually expanded from a very small
program in the nineteen thirties, acquired more and more beneficiaries,
provided more and more benefits through the 1950’s. Medicare and medicaid in the 1960’s.
Medicaid especially as a grant-in-aid program. A federal revenue sharing program. I was the next step in this and we’ve
only just seen the latest step of this in the Affordable Care Act in the last
couple of years. I want to conclude with that as an illustration this. How the
Affordable Care Act and the Supreme Court decisions upon it very recently are the
best illustrations of how we got the administrative state. The way in which the Supreme
Court has helped complete this. In the Sebelius case in 2012, the court said that Obamacare could not, in the individual mandate especially, could not be justified under Congress’s
power to regulate interstate commerce. That was something that states rights
advocates and conservatives all liked. On the other hand, the Supreme Court said that
it could be upheld under the taxing power. Even though congress swore that this was not a tax when they enacted it, the court reversed some of its previous
decisions about this and upheld it as an exercise of the taxing power. Then the
kicker in the Sebelius decision was the supreme court saying that there were limits to
the strings that Congress could attach when it gave money to the states. It other words, it threatened to wipe out all of these states medicare funds if they didn’t augment
their Medicaid programs according to the text of the act. And many states
did you exactly that. They did not establish state exchanges under the
Affordable Care Act, but then the Supreme Court undid this, most recently in the
King V. Burwell case, where it said well for the purposes of rescuing this we are
going to interpret the language of that statute of state exchanges as being the
same as federal exchanges. Since the Supreme Court has been throughout the 20th century
instrumental in preserving the way that the administrative state has come about. So for the most part I would say the way
that the states have done this to themselves, or at least we can see
state politicians have done to themselves, by acceding to these various exercises of
congressional power and interstate commerce, but mostly through the taxing and spending. So it has mostly been a fiscal process. Thank You.

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