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Federalism, Anyone?

The Bowles/Simpson report raises a vital question.

5:05 PM, Nov 12, 2010 • By KEVIN R. KOSAR
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The Ideological Origins of American Federalism by Alison L. LaCroix, Harvard, 320pp., $35

Federalism, Anyone?

This past week, Erskine Bowles and Alan Simpson released a draft report that delivered this unsettling news: “We must stabilize then reduce the national debt, or we could spend $1 trillion a year in interest alone by 2020.” That number looks all the scarier when one considers that the entire federal budget this past year was $3.6 trillion.

As co-chairmen of the National Commission on Fiscal Responsibility and Reform, Bowles/Simpson and their report attracted widespread media attention, and already the debate is on as to whether their proposed mixture of spending and tax cuts is dead on arrival. But curiously absent from the Report’s list of “guiding principles” is any mention of federalism. Perhaps this is understandable; the great drivers of the recent deficits are few and obvious: eternally swelling entitlement programs and defense spending, and the 2009 “stimulus act.”

Yet, it would be a pity if the debate over fiscal well-being did not include some consideration of federalism. The Constitution includes positive grants of power to the federal government (see Article I), explicit prohibitions (see Amendment I), and reservations of power to the states and the people (Amendment 10). In short, the Constitution provides some guidance as to what ends the federal government should be taxing and spending. And this, it seems, is a matter central to the debate over the federal budget.

That said, it would be foolish to assume that you could simply lay the Constitution next to the federal budget and begin crossing out great swaths from the budget. The Constitution has its share of vague points. For example, Article I empowers Congress to provide for the “general Welfare of the United States” but does not make clear just what that includes. Additionally, as Professor LaCroix shows in this engaging treatise, the who-does-what questions at the heart of federalism have vexed the nation from the get-go.

Federalism did not appear at the Constitutional Convention as a deus ex machina: Americans had lived under governance by multiple authorities since they landed on this continent. And LaCroix shows that the roots of federalism ran deeper, wending back to British and other Old World nation’s practices and legal doctrines. The Founders hard-bargained to produce a “messy” federal system, and they and their successors then spent decades crossing swords over its application to specific spending decisions.

The coming negotiations over federal spending and taxing will require plenty of wrangling and trade-offs. Despite the ambiguities of federalism, it should be part of the discussion.  The federal budget is not simply about dollars and cents; it also is a matter of principles and a collective vision for the country. Indeed, if the Bowles/Simpson report tells us anything, it is that spending money without much regard to the ends of government has not worked so well.

Kevin R. Kosar is the author, most recently, of  Whiskey: A Global History (Reaktion). 

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