Competitive Federalism: Leveraging the Constitution to Rebuild America

By Matt A. MayerCompetitive Federalism


Nothing is more unpopular than Washington, D.C. Americans rightfully identify that the federal government’s power over their lives is too invasive. A September 2011 Gallup poll found that 81 percent of citizens were dissatisfied with how America was being governed. Key findings of the Gallup Poll are:

  • 82 percent of Americans disapprove of the way Congress is handling its job;
  • 57 percent have little or no confidence in the federal government to solve domestic problems;
  • Americans believe, on average, that the federal government wastes 51 cents of every dollar; and
  • 49 percent of Americans believe the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens.

More recently, Gallup reported that 77 percent of Americans believe that “the way politics works in Washington these days” causes serious harm to America. From the size of Swiss cheese holes to how we run our local schools, Washington’s presence in our day-to-day lives is as pervasive and negative as ever.

Over the last forty years, several efforts were made to reduce the power of the federal government. All of those efforts (President Richard Nixon in 1972; President Ronald Reagan in 1981; and Speaker Newt Gingrich in 1994) ultimately failed because the system fights even the strongest reform efforts. Washington and those reformers in it seem utterly powerless against the centralized behemoth of the federal government.

Our Founding Fathers would not recognize the massive centralization of powers in America that began during the Progressive Era. The centralization of powers required the rise of a powerful administrative state to engage in the actions that needed to be taken to govern. It is this leviathan that repels many Americans, as its sheer size overshadows so much of American life.

One of its intellectual and political leaders was President Woodrow Wilson. The Progressive Movement’s chief aim was to centralize power by eliminating those pesky little concepts of separation of powers and checks and balances and escape the confines of a fixed constitution so that America could progress (not that it hadn’t up to that point as evidenced by the abolishment of slavery and its rise as a world power).

Wilson despised those constitutional mechanisms because they prevented government from “proceeding” in accordance with the will of “an outside master.”1 Wilson believed that the Constitution should be a living document. As Wilson stated: “All that progressives ask or desire is permission to interpret the Constitution according to the Darwinian principle.”2 The outside master, then, was the fittest among us whose societal beliefs could be inserted into the Constitution.

The adoption of this progressive view was certainly not the natural trajectory of the federal government. Rather, the rise of progressivism and the economic shock from the Great Depression weakened America’s natural resistance to a centralized administrative state. During that moment of weakness, progressivism malformed the American mind and fundamentally changed how we viewed government.

At times, Americans have been schizophrenic about government. They want government cut, but not the parts of government from which they receive benefits. This “cut theirs, not mine” mentality results in few, if any, real cuts. As programs grow, the special interest factions that support those programs only ensure continued funding. With the United States recently crossing the perilous threshold in which a ma- jority of Americans receive a transfer payment from government, as an equal majority pay no federal in- come taxes, unringing the bell of dependency grows more difficult with each passing year.

The reality is that the federal government is financially broke. Because it is not restricted by a balance budget requirement, the federal government can run up deficits and debts as far as the eye can see. As the fiscal crisis in Washington, D.C. advances, there is no better time than now to have a vigorous debate on how we best pull our country back from the fiscal brink and reinvigorate American Exceptionalism.

Americans face two stark choices: raise taxes to cover the ever-increasing costs of government and tackle the exploding national debt or realign government spending to fit the generous tax revenues Americans already provide to government. While cutting poorly performing programs is necessary, a core component of this latter choice must be to lower government costs by eliminating inefficiencies and increasing competition.

Central to this competition component is reconsidering the proper roles and responsibilities of and between federal, state, and local governments. We’ve tried the centralization of power in the federal government for the last eighty years. It hasn’t worked.

We must move the discussion away from populist promises to raise taxes on certain segments of Americans or to cut government by programmatic picking and choosing to the real issue—where do Americans want the locus of government power over their lives to reside? If the current federal-centric approach had delivered on the promises made by its advocates, then maintaining the status quo might be a viable route out of our fiscal crisis. Today, however, the federal government’s costs are high and the goods and services provided are mediocre, at best.

Given the disdain Americans have for the federal government and its poor track record of success, we believe a majority of Americans would prefer to deal with their state or local governments instead of the federal government. This preference comes from the fact that those governments, while certainly not perfect, are much closer to the people and, therefore, far more transparent and accountable.

Our conception of competitive federalism is unequivocally not an anti-government idea. Competitive federalism aims to rebalance the powers between the federal government and the states that more faithfully adheres to the Constitution. It is not government itself that is inherently troublesome; rather, it is the misappropriation of power by the federal government that requires action. The antidote is not the destruction of government. It is the returning of power to the states and a proper return to the natural constitutional order.

By advocating for getting power out of Washington and returning it to the states, we can debate the benefits Americans would receive by having more control closer to them and to the fiscal tax benefit of state control.

To read the entire report, click here: Competitive Federalism