Restoring Federalism

In the third volume of Law Legislation and Liberty, Hayek argued that something was amiss with western constitutions. They have failed to contain the growth of government or prevent the encroachments of discretionary power. He thought it was time to rethink the constitutional structures of the free world.

In conversation with a leading German political economist some years ago, it was pointed out to me that a singular defect of many federal systems, including that of the US, is the omission of a role for state authorities in the selection of their federal judiciaries.

Professor Roland Vaubel’s research has generally confirmed that judicial independence through life appointments has not been an effective barrier to increasing central government expenditures. So long as Judges do not also have some reason to preserve the integrity of local authorities, national governments tend to increase their share of total government outlays. See Roland Vaubel, “Constitutional Courts as Promoter of Centralization in Europe,” European Journal of Law and Economics, Vol. 28, No. 3 (December 2009), pp. 203-222. Professor Vaubel speculates on a variety of possible reasons, but whatever the cause, the correlations still hold.

In the US case, the Senate, through confirmation, was supposed to be the federal component in judicial selection. By bringing both experience and a degree of separation from direct popular election, the Senate, according to Madison, was to add an element of more mature deliberation to the legislative process. A number of arguments have been put forward to explain why this has largely failed.

One reason noted by Ralph Rossum has been the loss of any direct tie between senators and state governments (link no longer available). Under the original design, the Senate was to be selected by state legislatures. By the time the 17th Amendment was proposed, popular election had already become the rule in most states, but there was still the potential of state instruction of Senators, given that state law determined the rules of selection. With the amendment, the last link was cut. Some insist the amendment actually increased “federal” representativeness. In one sense that is quite true. As a legislative body, Senators could now work more directly with groups within their states without interference from local authorities. If a state’s interest is to be equated with the whole of the many organized concerns within it, then yes, this has increased their “federal” representativeness.

But that is not a recipe for the check Madison had in mind. Such popular representativeness has probably added to the kind of government growth Vaubel counts as part of the problem: increasing budgetary bloat, where Washington attempts to funnel resources to every interest, rather than limiting itself to purely national concerns. Interestingly, that looks just like the problem highlighted by Michael Greve in his book, The Upside Down Constitution.

What has been variously called cooperative or cartel federalism to delineate our modern political condition, has not so much restrained governments to specific jurisdictions, as fostered the expansion of governments at all levels. Such federalism is really the profligate sharing of the bounty of unrestrained spending. Linked as it is to the unlimited power of the general or national government to engage in inflationary monetary policy, and one has what amounts to a government feedlot.

Another explanation for the loss of a federal check predates the 17th Amendment: The slow erosion of the idea of powers granted and reserved. This began early with the move to expand general welfare into a general grant of power, as opposed to merely a statement of intent defined by the specific grants of Article 1, Section 8. When powers not granted were thought reserved to the states or to the people thereof, it was easier to assume that the Senate would perform a largely negative, restraining role in the legislative process.

When Hayek wrote his third volume, he contemplated the possibility of separating out the legislative function: one body to set rules for government administration, and another to consider rules for society in general. The first recognized the need to ensure an efficient administration of government functions. The second would be limited to considering laws that would apply to everyone equally. The two chambers, he thought would form a natural check on each other. See especially Hayek, Law, Legislation and Liberty (Chicago, 1979), pp. 105-107.

Knowing the practical difficulties of administering rules of government, the administrative chamber would supposedly put a break on too fanciful conceptions of social legislation. On the other hand, the second body would be constrained by the requirement to craft laws applicable to all equally and in general. This distinction always seemed to me too fine to work in practice. It would give artful lawyers a field day in the blurring of differences, and would likely prove too difficult for most people to separate out consistently.

Nonetheless, the constant blending of administrative and legislative functions has been a major source of government growth. Independent and Congressional agencies abound regularly mixing all aspects of governance. Such agencies, formed out of enormous omnibus legislation, comprise a particularly onerous mix of challenges, especially to the executive branches of government at all levels, but particularly at the state levels.

Governors are constantly beset by a bewildering array of laws, codes, and demands for resources. Keeping their states compliant forms a good portion of their time. Clearly, having knowledge of what is practical in the administration of laws would be a good element to have in the process by which laws are crafted. But such input exists only at the national level with the president’s veto, and even that can be overturned by Congress.

With the Senate no longer serving the Madisonian role assigned to it, we need to ask again, can we still add an element of the right kind of federalism to the legislative process?

The rational coherence of laws has much to do with the practicality of their administration. Executives must enforce what the legislators create—or at least they must try to live with what they have wrought. Few interests in government have the kind of intimate awareness of those challenges than the governors themselves.

Here we should think about combining both Professor Vaubel’s observation respecting a federal role for federal judiciaries, and Hayek’s observation of the distinctive function of administration, to realize Madison’s original goal of federal restraint.

For consideration, Pennsylvania, in its first constitution of 1776, had a body specifically to review past legislation and pass on its conformity with the state’s constitution. It thus had a very limited judicial role, distinct and separate from that of the state’s judiciary. That body of censors was to meet at specifically designated times and sit for a definite period. During the interim, laws passed by the state’s then unitary legislature would remain in force. The institution was eventually displaced by a later constitution for reasons of Pennsylvania politics, but what if we resurrected the notion at the federal level?

The National Governors’ Conference (NGC) was formed because governors were concerned that the interests of their states were not being adequately met. It is true that sometimes this body serves like any other interest to promote government growth as opposed to constrain it, but what if a body of governors were formed to exercise the same role as the old Pennsylvania council with only a negative?

Such a body would be charged with reviewing federal level legislation dealing with matters of internal regulation and taxation. It would decide firstly, which laws it wanted to review during a specifically defined period set by the amendment, and then decide on their constitutionality. Without any powers of origination, could such a body be a restraining federal element in the current constitutional structure?

The only reason for action on the part of such a council would be linked to the question of whether particular laws violated a principle of federalism by crossing what the council thought were constitutional limits. The incentive would be for governors to focus on legislation that placed undue and unreasonable burdens on their administrations. Questions of when, and how long, and of how many to form a quorum are matters to be worked out, as would be the efficacy of granting Congress a power to overturn such reviews, but surely this is another idea worth considering.

I would never wish such a body to be a chamber for originating law. Such would immediately change the incentives and its nature, but such a body could—whether it is to be comprised of all sitting governors or a majority thereof—bring a valuable perspective on the practical administration of the laws. Such a body would quite clearly have an interest in constraining that which would run up the state’s burdens without appreciably altering its economic and social well being.

There could be many downsides, but it is a place to begin the conversation. Alternative proposals are, of course, a balanced budget amendment (See http://www.balanceourbudget.com/) or Randy Barnett’s idea (See http://www.cato.org/publications/commentary/case-repeal-amendment).

Reader Discussion

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on August 14, 2013 at 14:31:28 pm

Good post. But shouldn't this been considered a Dickinsonian element, rather than a Madison. Madison thought the constitution was ruined when states came to be represented in the Senate. Dickinson was the first to give a plausible explanation of why it might be a good thing.

And how about simply adding a sunset clause to legislation--"all regulations enacted under this statute shall be made within 5(?) years of its passage." After that the legislature would have to pass a new law before the bureaucrats could write more legal code.

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Richard S
on August 14, 2013 at 15:40:35 pm

A frank return to the theories of interposition, nullification, and even the threat of secession would also be helpful. At least the former two are well grounded in Jefferson, Madison, and further developed by Calhoun. The Federal government must worry about real constitutionally grounded vetoes by the States, which all three are via the Compact Theory of Union, or it will continue running roughshod over the States' reserved powers.

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Peter Haworth
on August 14, 2013 at 21:52:02 pm

My thought has always been that the Supreme Court should be augmented by a Constitutional Court, of 5 state-appointed justices, that must approve any law by 5-0 before it can take effect. The CCJs would be appointed and voted upon by the 50 governors. The Supreme Court would continue to handle the application of constitutionally valid laws, while the Constitutional Court must approve any future law by unanamity and could nullify any existing law with a simple majority. The same admendment could require that all federal laws must have an expiration date stipulated, not exceeding 10 years from implementation.

It seems perhaps a bit simplistic, but I think it would solve most of the issues. The President used to play a role in vetoing unconstitutional legislation, but that was a century ago.

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John Ashman
on August 15, 2013 at 03:39:44 am

I've been toying with a similar idea for a while. I'll add two suggestions: (1) the council should have authority to cancel federal spending when there is a federal budget deficit; (2) the council should consist in persons appointed by the governors state legislators; (3) in order to preserve the partly-federal, partly national character of our Constitution, each delegate's vote will represent the votes of his states' House delegation, such that no measure be effective without the concurrence of a majority of the delegates (federal) AND a majority of the total votes represented (national).

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David Upham
on August 15, 2013 at 09:24:04 am

Another idea is what I call "Amendment Baiting".

Amendment baiting is demanding amendments for popular, existing programs, such as the Air Force, and NASA. While majorities would snivel at the idea that this is needed, the minority can fire back with the fact that it has near universal appeal and would pass easily so......??? Fail or not, move on to Social Security and other Welfare type programs, the Commerce Industrial Complex and other areas. Since virtually everything that has been done in the last 80 years requires an amendment, this would cause a wee bit of mayhem. Should any of the bills for any of these program bills actually pass Congress, the likelihood of getting them ratified would be close to zero, except for the Air Force and NASA. But even if they cannot be passed, it puts pressure on both Congress and the Judiciary to toe the line.

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John Ashman

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.