ISSN 0048-5950 PUBLIUS The Journal of Federalism THE STATE OF AMERICAN FEDERALISM 1985 An Annual Review of the American Federal System The State of American Federalism—1985 by John Kincaid and Stephen L. Schechter Garcia: Of Federalism and Constitutional Values by A. E. Dick Howard Intellectual Crisis in American Federalism: Meaning of Garcia by Lawrence A. Hunter and Ronald J. Oakerson The Deductibility of State and Local Taxes by Sarah F. Liebschutz and Irene Lurie Constitutional Dimensions of State and Local Tax by Daniel Patrick Moynihan Party Trends in 1985: Constrained Advance of the National Party by John F. Bibby McCloskey versus McIntyre: Implications of Contested Elections by Roberta Herzberg 1985 State Constitutional Rights Decisions by Ronald K. L. Collins and Peter J. Galie State High Courts, State Constitutions, and Individual Rights by Ronald K. L. Collins, Peter J. Galie, and John Kincaid Canadian Energy Policy in 1985: A Renewed Federalism? by Bruce G. Pollard The Macdonald Commission Report and Canadian Federalism by Ronald L. Watts Summer 1986 Volume 16, Number 3 Center for the Study of Federalism Temple University oTPUBLIUS was the pen name used by Alexander Hamilton, John Jay, and James Madison in 1787-1788 when they published 85 articles entitled The Federalist in defense of the federal republic created by the new American Constitution. Accordingly, it is an appropriate name for a jour- nal devoted to the increase and diffusion of knowledge about federalism and intergovernmen- tal relations. Editors: Daniel J. Elazar Bar Ilan University & Temple University John Kincaid North Texas State University Annual Review Stephen L. Schechter Editor: Russell Sage College Book Review Donald S. Lutz Editor: University of Houston Production & Linda J. Strube Copy Editor: North Texas State University Editorial Advisory Board: Thomas J. Anton Brown University Samuel H. Beer Boston College Lewis A. Dexter University of Maryland Ivo D. Duchacek City University of New York Max Frenkel Forschungs institut fiir Foderalismus und Regionalstrukturen, Switzerland Robert B. Hawkins, Jr. U.S. Advisory Commission on Intergovernmental Relations A.E. Dick Howard University of Virginia L: Adele Jinadu University of Lagos, Nigeria Irving Kristol The Public Interest E. Lester Levine Empire State College William S. Livingston University of Texas, Austin Catherine H. Lovell University of California, Riverside Alexandre Mare Centre internationale de formation européenne, France Elinor Ostrom Indiana University Vincent Ostrom Indiana University Neal R. Peirce Syndicated Columnist, Washington Post Writers Group William H. Riker University of Rochester Harry N. Scheiber University of California, Berkeley Ira Sharkansky Hebrew University of Jerusalem Donald V. Smiley York University David B. Walker University of Connecticut Murray L. Weidenbaum Washington University Frederick Wirt University of Illinois, Urbana-Champaign Deil S. Wright University of North Carolina, Chapel Hill THE CENTER FOR THE STUDY OF FEDERALISM is an interdisciplinary research and educational institute dedicated to the study of federal principles, institutions and processes as practical means of organizing political power in free societies. By initiating, sponsoring, or conducting research projects and educational programs related to them, the Center secks to increase and disseminate knowledge of the American and other federal systems, and federalism in general, and to train students as specialists in the growing field of intergovernmental relations. The Center is located in Temple University’s College of Liberal Arts and is associated with the Department of Political Science.An Intellectual Crisis in American Federalism: The Meaning of Garcia Lawrence A. Hunter and Ronald J. Oakerson U.S. Advisory Commission on Intergovernmental Relations In National League of Cities v. Usery (1976), the U.S. Supreme Court found that the Tenth Amendment requires the existence of a set of essential state powers that remains beyond the reach of congressional regulation or preemption. The Court reversed itself in Garcia y. San Antonio Metropolitan Transit Authority (1985), holding that the Tenth Amendment provides the Court no basis on which to limit the Congress in the exercise of its commerce powers. We argue that, although contradictory, both holdings can be inferred validly from the U.S. Con- stitution. This absurd result reveals profound inconsistencies in the constitutional design of Jederalism, requiring a constitutional solution. The article concludes with a discussion of a variety of constitutional remedies, including constitutional amendments. Generations of students have been taught that the Supreme Court of the United States is the great umpire of the American political system, an im- partial referee policing the boundaries of authority between institutions of government and between government and the individual. The role of the Court, as commonly understood, is to protect against an improper and un- constitutional exercise of power by any institution of government vis-a-vis any other institution or individual, including the actions of both federal and state governments in relation to one another. Yet from 1936 to 1976, the Court did not overturn a single act of Congress for encroaching unduly upon the powers of the states.! 'Between the turn of the century and the New Deal, the Court made a series of rulings that found congressional action in violation of the Tenth Amendment. Perhaps the most famous are the 1918 ruling striking down national child labor standards (Hammer v. Dagenhart, 246 U.S. 20), in which the Court embellished the Tenth Amendment to read that powers not ‘ex- pressly” delegated to the national government are reserved,” the 1922 Child Labor Tax Case (259 U.S. 20), and United States v. Butler (297 U.S. 1, 1936). Beginning in 1937, the Court reversed itself on restricting the powers of Congress under the Tenth Amendment. In cases that year, such as National Labor Relations Board v. Jones and Laughlin Steel Co. (301 U.S. 1) and Steward Machine Co. v. Davis (301 U.S. 548), the Court found the Tenth Amendment to be of limited relevance in assessing the constitutionality of congressional taxing and spend- ing policies. Although given several opportunities between 1937 and 1976, the Court refused to strike down national legislation on the grounds that it encroached on powers reserved to the states under the Tenth Amendment. See e.g., New York v. United States (326 U.S. 572, 1946) and Fry v. United States (421 U.S. 542, 1975). In reference to the Commerce Clause specifically, on only eight occasions prior to 1937 did the Court find that the Congress had exceeded its limits. The last such case (prior to 1976) was Carter v. Carter Coal Co. (298 U.S. 238, 1936), which invalidated the Bituminous Coal Conservation Act of 1935. The Court held in that case that regulation of production and labor relations lay beyond the allowable object of congressional power—regulation of interstate commerce. The Fair Labor Standards Act was Publius: The Journal of Federalism 16 (Summer 1986) 33