Federalism Under Obama

This article, prepared for a symposium at the William and Mary Law School on Constitutional Transformations to be published this fall in the William and Mary Law Review, analyzes the status of federalism under the Obama Administration. At first glance, federalism would seem to have fared poorly under the Obama Administration, given that the Administration’s signature achievements to date involve substantial expansions of the federal government’s role. But a careful examination of major measures such as health insurance and financial regulation reform, the stimulus, and preemption initiatives demonstrates that the story of federalism’s fate under the Obama Administration is not so simple. To be sure, these measures entail some preemption and new, sometimes substantial, state burdens. But each also has brought with it significant regulatory and financial opportunities for the states. Rather than assertions of federal power at the expense of the states, the central dynamic evident under the Obama Administration to date is a move towards more active government, at both the national and state level. States are given significant room to shape their participation in the new federal initiatives, as well as enhanced regulatory authority and expanded resources to do so. States that are eager to play a greater regulatory role and support the new federal policies therefore have much to gain. But states that choose to stay on the sidelines face the prospect of direct federal intervention or loss of access to substantial federal funds, and their ability to pursue their preferred regulatory (or deregulatory) strategies may be curtailed. Put differently, federalism under the Obama Administration is federalism in service of progressive policy, not a general devolution of power and resources to the states – but it can be an important form of federalism nonetheless. Equally significant, the experience so far under the Obama Administration highlights the central importance of the administrative sphere to modern day federalism. Moreover, a particularly interesting feature of the Obama Administration initiatives is their use of administrative structures that not only deeply embed the states in federal program implementation, but also give the states a role in setting the content of federal regulatory standards and even overseeing federal agency performance.