Federalism: Federalism and the Economic Crisis 3:45 p.m. – 5:15 p.m.  Grand Ballroom

• Dean John C. Eastman, Dean and Donald P. Kennedy Chair in Law, Chapman University School of Law
• Prof. Malcolm M. Feeley, Claire Sanders Clements Dean’s Chair Professor of Law, University of California Berkeley School of Law, Boalt Hall
• Prof. Roderick M. Hills, William T. Comfort, III Professor, New York University School of Law
• Prof. Ilya Somin, George Mason University School of Law

Moderator: Hon. Jeffrey S. Sutton, U.S. Court of Appeals, Sixth Circuit

John Eastman

Discussing spending clause, and need to have it related to enumerated power. Spending had to be for general welfare, not local or regional welfare. General meant national welfare, like common defense.

President would veto bills in 19th Century as unconstitutional that spent on local concerns.

Malcolm Feeely

They need someone from Berkeley and John Yoo is too busy working for John Eastman.

Brutus warned people to be aware of Federalist 78.

Federalism is not a viable idea in modern administrative state, and almost all federalism doctrine is incoherent.

Federalism is just a euphemism for decentralization

Ilya Somin

Judge Sutton zings him for going to Amherst, #2 to Williams.

Discussing his article about Federalism and Star Trek.

Consider the impact of federalism on the current economic crisis. He will suggest there are 2 ways the current crisis poses a threat. Reliance of state govs on federal funds, and expansion of federal regulations.

Why should we care which functions federalism prefers? We should value decentralization. Much of beneficial decentralization can only be achieved if we have constitutional and other structural constraints on the Federal Gov.

We want federalism to protect diversity of policy in a large nation with diverse interests. Need decentralization of authority to achieve some of that.

Diversity and competition promotes innovation and better policy. If states compete for labor and capital, incentive to adopt better policies. Enable people to vote with their feet and at the ballot box. Foot voting ahs important benefits over ballot box voting. With ballot box voting we tend to be rationally ignorant. Little chance vote can change the outcome, not much of an incentive.

Economic crisis has expanded federal power. States reliant on federal grants for revenue sources

If you can get money from federal sugar daddy, why get it from states?

Federal policies requires states to follow certain policies, decreases range of issues to engage in competition and innovation. Grants unlikely to be rolled back after crisis ends. Just because crisis ends doesn’t mean states won’t continue to lobby.

General welfare clause does not mean whatever Congress said it mean. Pessimistic court will roll it back. Courts are moving further in wrong direction.

Easier to bribe states through spending clause than through commandeering.

Roderick M. Hills

Federal courts can’t and shouldn’t and don’t need to impose limits on Congress’s spending clause power.

There are constitutional limits on spending power, and are rooted in general welfare clause, but have never been enforced by Courts, they have been enforced by President.

6th Circuit case discussing No Child Left Behind, split 8-8. (Judge Sutton is on the panel).

Judge Sutton, Moderating

Why can’t there be a judicially enforced federalism?

Feeley- Political problem, political will. not a federal system in the world that has a judicially enforced federalism system.

Somin- general welfare cannot be read so broadly to subsume common defense clause. Judges often vote their policy preferences, but over time as we develop a precedent, there can be a cross-ideological agreement.

Question- There are no interest groups in favor of federalism? States do not want federalism. Interest groups do not want it.

Hills- I do want federalism, but spending clause takes care of itself.

Somin- 17th amendment did not destroy Senators. Most states had committed to have popular election of senators. State legislatures like federal funds, have reasons to support expansion of federal power, not obvious that popularly elected senators, many of whom are bad people, may not represent federalist needs.

Ron Rotunda Question- States cannot turn down money. In stimulus bill, state legislature can override Governor’s veto. Governor from South Carolina turned it down, but then he went on a vacation to Argentina.

Feely- No one would fight for their state. Sutton: Ever go to a Ohio State/Michigan Game?

Pics after the jump