2026 Federalism Summit

The U.S. Constitution creates a federal system of government by separating powers and responsibilities between the national and state governments.

James Madison described this system as a compound republic that combines elements of unitary and confederal political systems. The consequence of dividing power between two distinct governments (national and state) and then subdividing those powers between branches of government, Madison claimed, would provide a double security protecting the people’s liberties.

Though unique in many ways, America’s federal system has historical roots in the Mayflower Compact that created a limited government accountable to the people, the colonial period when Britain largely neglected the colonies and allowed them to self-govern, and the Articles of Confederation that governed America through the Revolutionary War.

America’s federal system is dynamic. While the U.S. Constitution grants the national government particular powers and the state governments general powers, the actual mix and interactions between the national and states government is quite flexible. “The question of the relation of the States to the federal government,” future U.S. President Woodrow Wilson wrote in 1908, “is the cardinal question of our constitutional system. At every turn of our national development we have been brought face to face with it, and no definition either of statesmen or of judges has ever quieted or decided it.”

America’s federal system of government, since its inception at the Constitutional Convention in 1787, has taken many forms. In the last century, significant powers were centralized in the national government based on a belief that experts should decide policy, good government could be scaled, and centralized authority would create a national democratic union and national unity.

Referring to our contemporary political system, Senator Daniel Patrick Moynihan wrote, “There is no significant aspect of national life about which there is not likely to be a rather significant national policy. It may be a hidden policy. … But it is policy withal.” In other words, the national government governs almost without borders.

And Madison warned that placing too much responsibility on the national government would shift power from Congress to the president. If asked to do too much, Madison reasoned, a deliberative body like Congress will become deadlocked and must defer decision-making authority to the executive which was designed to act with dispatch. The result is what we see today, each party advances its partisan preferences as far as possible when it controls the executive via executive orders and emergency measures.

That is not all. After nearly a century of growing nationalization, we see contentious populism and polarization, rising national debt, almost insurmountable obstructions to growth, harmful policy decisions, and declining K-12 students’ test scores. Each is problematic, collectively they are strong indicators of the inadequacies of centralization.

Speaking of the national debt, Alice Rivlin, Director of the Office of Management and Budget during the Clinton Administration, wrote, “The grim outlook for the federal budget makes it inevitable that in the near future strains between the federal government and the states over funding domestic programs will escalate into a crisis. . .. Federal decisionmakers will be forced to choose among extremely unpopular options—raising taxes, reneging on promises to the elderly, and drastic cuts in other spending, including money for state and local governments. . . Responding adequately to these widely felt needs will take constant attention to improving the functioning of our federal system.” The solution, Director Rivlin recognized, will not come from more centralization but a restoration of a functioning federalism.

In 1998, the Urban Institute warned that our contemporary policies have the potential to deprive Americans of their most basic commitment and identity, that of self-government. “Stripped down to its essentials, the American political process expresses a faith in self- government. It is the democratic faith that through argument, deliberation, and persuasion people are, in the long run, capable of discovering and promoting their common good. . . If one rejects democratic self-rule through public debate and deliberation, the only alternatives are rule based on the will of the most powerful, or rule based on deference to experts, insiders, whoever is seen as specially anointed to tell other people what to do.” 8 Self-government, the Urban Institute proclaimed, is the government we deserve.

Maintaining America’s compound republic to secure self-government was always going to require fighting against natural forces. Federalism is a compromise between contrasting desires to be big to fulfill a common interest (such as deter outside aggressors or create a common market) versus the desire to preserve the liberties from being small, local, and free. Federalism emerges from the desire to be both united for some things and autonomous for others. Sustaining that tension is difficult because the “natural tendency of any political community, whether large or small, is to completeness, to the perfection of its autonomy.” Federalism, political scientist Martin Diamond observed, is the effort to deliberately modify that tendency.

A similar thought was expressed by Alexis de Tocqueville nearly 150 years earlier when he wrote, “I think that in the dawning centuries of democracy individual independence and local liberties will be the products of art. Centralized government will be the natural thing.”

After a century of centralizing power in Washington, D.C., we should ask whether science has led us here or if we have used science to justify the natural thing?

The growing problems, dysfunction, and lack of solutions along our current path indicate a need to rethink our old choices. Perhaps direction forward may be found in a simple phrase that appears in many state constitutions: “A frequent recurrence to fundamental principles is absolutely necessary to preserve the blessings of liberty” We think it is time to recur to federalism, to consider it not as a pragmatic political compromise of 1787, but as a discovered, fundamental principle of good governance.